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DESCRIPTION OF BUSINESS
12 Months Ended
Dec. 31, 2013
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
NOTE 1 - DESCRIPTION OF BUSINESS

Summary

 

FitLife Brands, Inc., formerly Bond Laboratories, Inc. (the “Company”), is a national provider of innovative and proprietary nutritional supplements for health conscious consumers marketed under the brand names NDS Nutrition Products™ (“NDS”) (www.ndsnutrition.com), PMD™ (www.pmdsports.com), SirenLabs™ (www.sirenlabs.com) and CoreActive™ (www.coreactivenutrition.com). The Company manufactures and distributes a full line of nutritional supplements to support athletic performance, weight loss and general health predominantly through franchised General Nutrition Centers, Inc. (“GNC”) stores located both domestically and internationally.

 

The Company was incorporated in the State of Nevada on July 26, 2005. In October 2008, the Company acquired the assets of NDS Nutritional Products, Inc., a Nebraska corporation, and moved those assets into its wholly owned subsidiary NDS Nutrition Products, Inc., a Florida corporation (“NDS”).

 

FitLife Brands is headquartered in Omaha, Nebraska. For more information on the Company, please go to http://www.fitlifebrands.com. The Company’s common stock currently trades under the symbol FTLF on the OTCBB market.

 

Recent Developments

 

Corporate Name and Stock Symbol Change

 

On September 30, 2013, the Company filed the amendment to its Articles of Incorporation, as approved by a majority of the Company’s stockholders on July 17, 2013, with the Nevada Secretary of State to change its corporate name from Bond Laboratories, Inc. to FitLife Brands, Inc. (the “Name Change”). The Financial Industry Regulatory Authority (“FINRA”) approved the Name Change, and a change to the Company’s stock symbol on September 28, 2013. On October 28, 2013, the Company’s stock began trading under its new symbol, FTLF, to better reflect the new name of the Company.

 

Reverse Split

 

On September 30, 2013, the Company filed an amendment to its Articles of Incorporation, as authorized by a majority of the Company’s stockholders on July 17, 2013, with the Nevada Secretary of State to implement a reverse split of its common stock on a ten old for one new basis (the “Reverse Split”). The Reverse Split was approved by FINRA on September 28, 2013, and became effective at the opening of trading on September 30, 2013.

 

Term Loan

 

On September 4, 2013, the Company executed a Term Loan Agreement and ancillary documents resulting in a $2.6 million term loan from U.S. Bank to the Company (the “Bank”) (the “TermLoan”), which Term Loan accrues interest at a rate of 3.6% per annum and matures on August 15, 2018. The Company's repayment of the Term Loan is guaranteed by NDS, and is secured by a continuing security interest in substantially all of the Company's assets, including the Company's interest in NDS. 

 

Proceeds from the Term Loan were used, in part, to finance the Company's partial redemption of the Series C Convertible Preferred Stock (“Series C Preferred"), and the Company's redemption of all outstanding shares of the 10% Cumulative Perpetual Series B Preferred Stock (“Series B Preferred”), as described below. 

 

Redemption of the 10% Cumulative Perpetual Series B Preferred Stock

 

On August 30, 2013, the Company mailed a notice of redemption (the “Redemption Notice”) to all holders of its Series B Preferred, notifying each holder of the Company's intention to redeem all 103.3 issued and outstanding shares of Series B Preferred on September 30, 2013 (the “Series B Redemption”). Under the Certificate of Designation of the Relative Rights and Preferences of the 10% Cumulative Perpetual Series B Preferred Stock (the “Certificate of Designation”), each share of Series B Preferred is redeemable for $10,000.00 per share, plus all accrued dividends, less any applicable tax withholding as may be required by law. The Company reserved approximately $1.9 million from the proceeds of the Term Loan to finance the Series B Redemption, of which $1.9 million has been distributed to former holders of Series B Preferred as of the date of the filing of this report representing 102.3 of the 103.3 shares of Series B Preferred outstanding prior to the Series B Redemption. The Company continues to make all reasonable efforts necessary to distribute the remaining amount payable in connection with the Series B Redemption. Notwithstanding the above, all shares of the Series B Preferred are considered redeemed and dividends are not and will not accrue on the undispersed amount.

 

Redemption and Conversion of the Series C Convertible Preferred Stock

 

On September 27, 2013, the Company entered into an agreement with each holder of the Company's Series C Preferred to, collectively: (i) redeem one-half of the issued and outstanding shares of Series C Preferred for $10,000 per share, plus all accrued dividends thereon, resulting in the payment of $670,085 to the holders of the Series C Preferred; (ii) convert all remaining shares of Series C Preferred and accrued dividends thereon into shares of the Company's common stock at $0.25 per share, resulting in the issuance of a total of 2,680,337 shares of common stock, calculated prior to consummation of the Reverse Split; and (iii) the cancellation of warrants to purchase 2.5 million shares of common stock, which warrants were issued in connection with the original Series C Preferred financing, for 624,998 shares of common stock, each calculated prior to consummation of the Reverse Split (collectively, the “Series C Recapitalization Transactions”).

 

Upon the completion of the closing of the Term Loan, Series B Redemption and Series C Recapitalization Transactions, the Company’s capitalization consisted of approximately 8.1 million shares of common stock, $2.6 million of long-term debt held by U.S. Bank, a $3.0 million credit line also provided by U.S. Bank, of which approximately $436,000 was drawn as of December 31, 2013, and approximately 400,000 outstanding options and warrants to purchase common stock, a large portion of which remain significantly out of the money.