SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported) January 12, 2001
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Health & Nutrition Systems International, Inc.
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(Exact name of registrant as specified in its charter)
Florida
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(State or other jurisdiction of incorporation)
0-29245 65-0452156
(Commission File Number) (IRS Employer Identification No.)
3750 Investment Lane, Suite 5, West Palm Beach, Florida 33407
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(Address of principal executive offices, including Zip Code)
Registrant's telephone number, including area code (561) 863-8446
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N/A
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(Former name or former address, if changed since last report)
Item 2. Acquisition or Disposition of Assets
On January 12, 2001, Health & Nutrition Systems International, Inc.
purchased the Heritage Consumer Products, LLC "Acutrim" trademark and
outstanding inventory of its Acutrim Natural AM and Acutrim Natural PM products
for approximately $180,000, pursuant to a secured party's bill of sale from
Heritage Consumer Products' lender, Fleet National Bank. In connection with the
purchase, Heritage Consumer Products assigned to Health and Nutrition Systems
all of its rights, title and interest in the "Acutrim" trademark and two related
trademarks.
Acutrim Natural AM and Acutrim Natural PM are natural herbal formulas.
Health and Nutrition Systems did not acquire any other Acutrim products in the
acquisition. The original Acutrim products contained Phenylpropanolamine,
commonly referred to as "PPA", which was the subject of a public health advisory
and a voluntary recall request by the Food and Drug Administration in November
2000.
Steven Pomerantz, Chief Executive Officer, Treasurer and a director of
Health & Nutrition Systems, pledged a $100,000 SunTrust Bank certificate of
deposit he holds personally as security for a $100,000 commercial bank loan from
SunTrust Bank to Health & Nutrition Systems, the proceeds of which were used to
pay a portion of the purchase price of the assets acquired. The company and Mr.
Pomerantz entered into a related agreement on January 12, 2001, providing for
payment of $5,000 to Mr. Pomerantz as compensation for pledging his certificate
of deposit, and providing that Mr. Pomerantz is permitted to withdraw the
certificate of deposit upon 30 days' written notice to the company.
Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit
Number Description
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10.1 Secured Party's Bill of Sale between Fleet National Bank and
Health & Nutrition Systems International, Inc. dated January
12, 2001.
10.2 Trademark Assignment from Heritage Consumer Products, LLC to
Health & Nutrition Systems International, Inc., dated January
12, 2001.
10.3 Agreement between Health and Nutrition Systems International,
Inc. and Steven Pomerantz dated January 12, 2001.
99.1 Press Release dated January 24, 2001.
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HEALTH & NUTRITION SYSTEMS
INTERNATIONAL, INC.
By: /s/ Steven A. Pomerantz
---------------------------------
Steven A. Pomerantz
Dated: January 26, 2001 Treasurer and Chief Executive Officer
3
Exhibit Index
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Exhibit
Number Description
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10.1 Secured Party's Bill of Sale between Fleet National Bank and
Health & Nutrition Systems International, Inc. dated January
12, 2001.
10.2 Trademark Assignment from Heritage Consumer Products, LLC to
Health & Nutrition Systems, Inc., dated January 12, 2001.
10.3 Agreement between Health and Nutrition Systems International,
Inc. and Steven Pomerantz dated January 12, 2001.
99.1 Press Release dated January 24, 2001.
4
EXHIBIT 10.1
SECURED PARTY'S BILL OF SALE
This Secured Party's Bill of Sale and Agreement (the "Secured Party's
Bill of Sale") is made this 12th day of January, 2001 by and between:
FLEET NATIONAL BANK, Agent, with an office at 100 Federal Street,
Boston, Massachusetts (the "Secured Party"); and
Health & Nutrition Systems International, Inc., a Florida corporation
with an office at 3750 Investment Lane, Suite 5, West Palm Beach,
Florida 33404 (the "Purchaser")
in consideration of all amounts required to be paid and performed in accordance
with this Secured Party's Bill of Sale.
Sale of Assets.
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1. For good and valuable consideration, and in consideration of the
payment by the Purchaser of the sum of One Hundred Seventy-Nine Thousand
Twenty-Eight and 35/100 ($179,028.35) Dollars (the "Purchase Price"), the
Secured Party hereby sells, assigns, and transfers to the Purchaser all right,
title, and interest of Heritage Consumer Products, LLC, a Delaware limited
liability company (the `Borrower") in and to certain tangible and intangible
personal property comprising certain of the Borrower's business assets
(collectively, the "Purchased Assets") listed on Exhibit "A," annexed hereto and
incorporated herein by reference, in which The Secured Party has been granted a
security interest by the Borrower.
Representations of Secured Party.
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2. The Secured Party warrants and represents that:
a. The Secured Party was granted by the Borrower, and currently holds,
a valid perfected security interest in all of the Purchased Assets.
b. The Secured Party has not previously sold, assigned, transferred, or
encumbered the Purchased Assets.
c. The execution by the Secured Party of this Secured Party's Bill of
Sale and the performance by the Secured Party of its obligations hereunder have
been duly authorized by all requisite corporate action. Neither such execution
nor such performance will violate any order of any court or governmental agency
or any agreement by which the Secured Party is bound:
d. This secured party's sale is conducted in accordance with
Section 9-504 of the Uniform Commercial Code.
e. The Purchaser shall acquire all of the Borrower's right, title, and
interest in and to the Purchased Assets free and clear of the lien and security
interest pursuant to which this sale is made, as well as any lien or security
interest subordinate thereto.
Representations and Acknowledgments of Purchaser.
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3. The Purchaser acknowledges and agrees that, except as expressly
provided in Paragraph 2, above:
a. This secured party's sale is made WITHOUT any representations or
warranties whatsoever by the Secured Party, whether expressed, implied, or
imposed by law. Without limiting the generality of the foregoing exclusion of
representations and warranties, this secured party's sale is made WITHOUT ANY
WARRANTY OF MERCHANTABILITY and WITHOUT ANY WARRANTY OF FITNESS FOR A PARTICULAR
PURPOSE.
b. The Purchaser acknowledges and agrees that the Secured Party is
selling only those Purchased Assets in which the Secured Party has been granted
a security interest by the Borrower, and not any items of leased property or
other items in the possession of the Borrower, but not owned by the Borrower.
c. The Purchaser acknowledges. and agrees that the Purchaser is not
purchasing any of the other assets of the Borrower, all of which are expressly
excluded from this secured party's sale.
d. The Purchaser further warrants and represents that the Purchaser (i)
has made its own independent investigation and evaluation as to the nature and
sufficiency of the Purchased Assets, (ii) is acquiring the Purchased Assets AS
IS and WHERE IS, (iii) has entered into this transaction after consultation with
independent counsel of the Purchaser's own selection, and (iv) is not relying
upon any representation or warranty of the Secured Party in consummating this
transaction.
e. Upon delivery of this Secured Party's Bill of Sale, all risk of loss
with respect to the Purchased Assets shall transfer to the Purchaser. The
Purchaser further acknowledges and agrees that by accepting this Secured Party's
Bill of Sale, the Purchaser has received all of the Purchased Assets to be
transferred hereunder and the Secured Party has performed all and singular its
obligations to the Purchaser in connection with this transaction.
f. The Purchaser warrants and represents that the Purchaser has full
power and authority to execute, deliver, and perform its agreements set forth
herein, and the person executing and delivering this Secured Party's Bill of
Sale in the name, and on behalf of the Purchaser has been duly authorized so to
do.
Remedy for Breach of Representations and Warranties
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4. Upon the determination by a court of competent jurisdiction that any
of the representations or warranties made by the Secured Party as set forth in
Paragraph 2, above, was not materially true. accurate, or complete, the
Purchaser shall be entitled to a refund of all or a portion, as may be
appropriate under the circumstance, of the Purchase Price actually paid by the
Purchaser to the Secured Party. The Purchaser acknowledges and agrees that the
Purchaser's sole and exclusive remedy for any such breach, both at law and in
equity, shall be limited to such a refund. In no event shall the Secured Party
ever be liable to the Purchaser or its successors or assigns for any incidental,
consequential, special, or punitive damages arising out of any breach by the
Secured Party of the terms and conditions of this Secured Party's Bill of Sale
or otherwise in any way relating to this transaction or the Purchased Assets.
Indemnification of Secured Party by Purchaser
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5. The Purchaser shall indemnify, defend, and hold (i) the Secured
Party, and (ii) and any employee, officer, or agent of the Secured Party (each,
an "Indemnified Person") harmless of and from any claim brought or threatened
against any Indemnified Person by any person or entity (as well as from
attorneys' reasonable fees and expenses in connection therewith) arising out of,
or on account of, facts, circumstances, and occurrences which arise or occur
from and after the date of this Secured Party's Bill of Sale due to the acts or
omissions of the Purchaser (each of which may be defended, compromised, settled,
or pursued by the Indemnified Person with counsel of the Secured Party's
selection, but at the expense of the Purchaser) other than any claim as to which
a final determination is made in a judicial proceeding (in which the Secured
Party and any other Indemnified Person has had an opportunity to be heard),
which determination includes a specific. finding that the Indemnified Person
seeking indemnification had acted in a grossly negligent manner or in actual bad
faith.
Miscellaneous
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6. This Secured Party's Bill of Sale constitute the entire agreement
between the Secured Party and the Purchaser, shall be construed in accordance
with the internal law of The Commonwealth of Massachusetts without regard to any
conflicts of laws or principles, and is intended to take effect as a sealed
instrument.
a. The Purchaser agrees that any legal action proceeding, case, or
controversy against the Purchaser with respect to this Secured Party's Bill of
Sale may be brought in the Superior Court of Suffolk County Massachusetts or in
the United States District Court, District of Massachusetts, sitting in Boston,
Massachusetts, as the Secured Party may elect in the Secured Party's sole
discretion. By execution and delivery of this Secured Party's Bill of Sale, the
Purchaser, for itself and in respect of its property, accepts, submits, and
consents generally and unconditionally, to the jurisdiction of the aforesaid
courts.
b. The Purchaser WAIVES personal service of any and all process upon
it, and irrevocably consents to the service of process our of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by certified mail, postage prepaid, to the Purchaser at the Purchaser's
address set forth above.
c. The Purchaser WAIVES, at the option of the Secured Party, any
objection based on forum non conveniens and any objection to venue of any action
or proceeding instituted under this Secured Party's Bill of Sale or the
Agreement and consents to the granting of such legal or equitable remedy as is
deemed appropriate by the Court.
d. Nothing herein shall affect the right of the Secured Party to bring
legal actions or proceedings in any other competent jurisdiction.
e. The Purchaser agrees that any action commenced by the Purchaser
asserting any claim or counterclaim arising under or in connection with this
Secured Party's Bill of Sale or the Agreement shall be brought in the Superior
Court of Suffolk County Massachusetts or in the United States District Court,
District of Massachusetts, sitting in Boston, Massachusetts, and that such
Courts shall have exclusive jurisdiction with respect to any such action.
Executed at Boston, Massachusetts this 12th day of January, 2001.
"Secured Party"
FLEET NATIONAL BANK, Agent
By: /s/
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Title: Authorized Officer
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Date: January 12, 2001
Accepted on the terms set forth herein:
"Purchaser"
HEALTH & NUTRITION SYSTEMS
INTERNATIONAL, INC.
By: /s/Christopher Tisi
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Title: President
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Date: January 12, 2001
Consented to by:
HERITAGE CONSUMER PRODUCTS, LLC
By: /s/ Ronald N. Kittner
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Title: President
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Date: January 12, 2001
EXHIBIT "A"
Purchased Assets
All "Accutrim inventory described on Schedule 1 hereto, all outstanding purchase
orders, if any, received by the Borrower for "Accutrim" inventory, and the
trademarks relating to the "Accutrim" brand listed on Schedule 2 hereto.
SCHEDULE 1
[HERITAGE HERITAGE CONSUMER PRODUCTS, L.L.C.
LOGO] Analysis of Prepaid Vendor Advances
Account #14050
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Reference Description Units (Tablets) Dollars
Garden State Nutritional:
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10/16/00 00010939 Acutrim AM (50% deposit P.O. Box #51642 1,521,083 $ 41,025.00
tabs)
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00010939 Acutrim PM (50% deposit P.O. Box #51643 1,509,411 $ 39,750.00
tabs)
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11/18/00 423127500 Acutrim AM (50% D.P.) addl P.O. Box #451642 1,000,000 $ 13,675.00
tabs due 12/18
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11/8/00 423131500 Acutrim PM (50% deposit P.O. Box #51643 500.000 $ 6,625.00
tabs) addl tabs due 12/18
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11/10/00 51651-VA Acutrim PM (50% deposit P.O. Box #51650 2,000.000 $ 26,500.00
tabs) tabs for Jan. promo
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11/10/00 51650-VA Acutrim AM (50% deposit P.O. Box #51651 1,875,00 $ 25,640.50
tabs) tabs for Jan. promo
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12/4/00 00011067 Acutrim Natural AM & PM P.O. Box #51583/84 $ 812.85
(Bal due prev. orders)
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Subtotal $ 154,028.35
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SCHEDULE 2
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Trademark Registration Number
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Acutrim 1266820
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EXHIBIT 10.2
TRADEMARK ASSIGNMENT
This Trademark Assignment (hereinafter referred to as "Assignment") is
effective as of the 12th day of January, 2001, by and between Heritage Consumer
Products, LLC., a Delaware limited liability company (hereinafter referred to as
"Assignor") having its principal place of business at Brookfield Commons, 246
Federal Road, Suite CL-14, Brookfield, Connecticut 06804, and Health & Nutrition
Systems International, Inc. (hereinafter referred to as "Assignee") having its
principal place of business at 3750 Investment Lane, Suite 5, West Palm Beach,
Florida 33404.
WHEREAS, Fleet National Bank, as Agent (the "Agent") transferred
certain of the assets of the Assignor in which the Agent claimed a security
interest to Assignee;
WHEREAS, Assignor has adopted, used, is using, and is the owner of the
trademarks reflected on the trademark registrations and Application for
Trademark Registration listed in Schedule A, attached hereto and incorporated
herein by this reference, and all other rights appurtenant thereto, including,
but not limited to, all common law rights, trade name rights, causes of action,
and the right to recover for past infringement (hereinafter collectively
referred to as ("Trademarks");
WHEREAS, Assignee is desirous of acquiring all rights, title, and
interest in and to the Trademarks;
WHEREAS, in connection with the sale by the Agent to the Assignee,
Assignor is willing to execute this Trademark Assignment confirming the
assignment to Assignee all rights, title, and interest in and to the Trademarks;
NOW, THEREFORE, for good and adequate consideration, the receipt and
sufficiency of which is hereby acknowledged, Assignor hereby assigns and sells
to Assignee all rights, title and interest as Assignor may possess in and to the
Trademarks as set forth in Schedule A and goodwill of the business associated
therewith.
HERITAGE CONSUMER PRODUCTS, LLC
a Delaware limited liability company
Executed as of this 12th
day of January, 2001.
By: /s/ Ronald N. Kittner
--------------------------------
Name: Ronald N. Kittner
--------------------------------
Title: President
--------------------------------
SCHEDULE A
Word Mark: ACUTRIM LATE DAY
Goods and Services: IC 005, US 018, G&S: APPETITE SUPPRESSANT. FIRST
USE: 19860424. FIRST USE IN COMMERCE: 19860424
Mark Drawing Code: (1) TYPED DRAWING
Serial Number: 73601100
Filing Date: May 27, 1986
Published for Opposition: September 30, 1986
Registration Number: 1421697
Registration Date: December 23, 1986
Owner (REGISTRANT) CIBA-GEIGY CORPORATION
CORPORATION NEW YORK 444 SAW MILL RIVER
ROAD ARDSLEY NEW YORK 10502
Assignment Recorded: ASSIGNMENT RECORDED
Attorney of Record: JOANN VILLAMIZAR
Prior Registrations 1266820
Type of Mark: TRADEMARK
Register: PRINCIPAL
Affidavit Text: SECT 15. SECT 8 (6-YR)
Live/Dead Indicator: LIVE
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Word Mark: ACUTRIM COMPLETE
Goods and Services: IC 005, US 006 018 044 046 051 052. G&S: Pharmaceutical
products, specifically appetite suppressants
Mark Drawing Code: (1) TYPED DRAWING
Serial Number: 75525378
Filing Date: July 24, 1998
Filed ITU:: FILED AS ITU
Published for Opposition: October 10, 2000
Owner (APPLICANT) Heritage Consumer Products, LLC LIMITED
LIABILITY COMPANY DELAWARE Breakfield Commons
246 Federal Road, Suite CL-41 Brookfield CONNECTICUT
06804
Attorney of Record: GARY I. YINGLING
Disclaimer: NO CLAIM IS MADE TO THE EXCLUSIVE RIGHT TO
USE "COMPLETE" APART FROM THE MARK AS
SHOWN
Type of Mark: TRADEMARK
Register: PRINCIPAL
Live/Dead Indicator: LIVE
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A-1
Word Mark: ACUTRIM
Goods and Services: IC 005, US 018, G & S: Appetite Suppressant. FIRST USE:
19821008. FIRST USE IN COMMERCE: 19821008
Mark Drawing Code: (1) TYPED DRAWING
Serial Number: 73400290
Filing Date: October 18, 1982
Published for Opposition: November 22, 1983
Registration Number: 1266820
Registration Date: February 14, 1984
Owner (REGISTRANT) Ciba-Geigy Corporation d.b.a. Ciba
Consumer Pharmaceuticals CORPORATION NEW YORK
444 Saw Mill River Road Ardsley NEW YORK 10502
Assignment Recorded: ASSIGNMENT RECORDED
Type of Mark: TRADEMARK
Register: PRINCIPAL
Affidavit Text: SECT 15. SECT 8 (6-YR)
Live/Dead Indicator: LIVE
A-2
EXHIBIT 10.3
AGREEMENT BETWEEN HEALTH & NUTRITION
SYSTEMS INTERNATIONAL, INC.
AND
STEVEN POMERANTZ
THIS AGREEMENT is entered into by and between STEVEN POMERANTZ of 6020
N.W. 67th Court, Parkland, FL 33067 (hereinafter POMERANTZ), and HEALTH &
NUTRITION SYSTEMS INTERNATIONAL, INC., 3750 Investment Lane, Suite 5, West Palm
Beach, Florida 33404 (hereinafter HNS and/or Company) (both referred to as
parties) on this 12th day of January, 2001, and in consideration of the mutual
promises made herein, the parties hereby agree as follows:
1. STEVEN POMERANTZ shall pledge a C.D. (C.D.) in the amount of
100,000.00 currently held at SunTrust Bank, Northlake Branch, North Palm Beach
County, Florida in the name of Steven Pomerantz for a loan to be obtained by HNS
in the principal amount of $100,000.00, said loan to be obtained on terms
mutually agreeable to POMERANTZ and HNS.
2. HNS agrees that it shall abide by all terms and conditions of said
loan and shall not cause any default to occur pursuant to this agreement or
pursuant to any loan agreement with SunTrust, which shall in any way, adversely
affect the C.D. held by POMERANTZ.
3. POMERANTZ, shall at any time be permitted to withdraw the collateral
upon thirty (30) days' written notice to HNS and, if necessary, to SunTrust, at
which time the loan will be paid in full by HNS.
4. HNS specifically agrees that, if POMERANTZ desires to withdraw the
collateral, that it shall repay immediately all sums due and owing to SunTrust.
5. HNS, upon receipt of the loan proceeds, shall pay to POMERANTZ, as
compensation for providing the collateral for this loan the sum of $5,000.00.
6. In the event of any default pursuant to this Agreement, and if it is
necessary for any party to seek to enforce this Agreement, the prevailing party
shall be entitled to attorney's fees and costs, all deemed to be expenses.
7. It is further agreed by and between the parties that any action
sought to enforce this Agreement, shall be brought in Palm Beach County,
Florida.
/s/ Steven Pomerantz
-------------------------------------------
STEVEN POMERANTZ
HEALTH & NUTRITION SYSTEMS
INTERNATIONAL, INC., a Florida corporation
By: /s/ Christopher Tisi
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Name: Christopher Tisi
--------------------------------------
Title: President
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2
EXHIBIT 99.1
Press Release
Health And Nutrition Systems International, Inc. Purchases ACUTRIM Trademark
WEST PALM BEACH, Fla.--(BW HealthWire)--Jan. 24, 2001--Health And Nutrition
Systems International, Inc. (OTCBB:HNNS - news) announced today that the company
has purchased in an undisclosed cash transaction the "ACUTRIM" trademark and the
outstanding inventory of the "new" Acutrim Natural AM and the Acutrim Natural PM
product lines. Acutrim is currently being sold in over 25,000 Food, Drug, and
Mass Market Retailers, such as Albertson's, American Drug Stores, Rite-Aid,
Walgreens, Eckerds, Phar-Mor, Duane Reade, Target, and others. The Acutrim
trademark was first established by Ciba-Geigy in 1982.
In making the announcement, HNS President Chris Tisi commented, "We believe the
purchase of the Acutrim trademark and the resulting distribution provides us
with a strong line extension for the diet category." Tisi also added "Acutrim is
a branded name in the diet category that has been recognized for over 18 years."
Established in October 1993, HNS develops and markets weight management
products. The company has established its products in over 20,000 Health Food
and Drug Store Retailers such as GNC, Vitamin World, Vitamin Shoppes, Walgreens,
CVS, Rite Aid, Eckerds, Albertson's, Pharmor and others, along with 4,000
independent health food stores, gyms and pharmacies through the company's B to B
division called HNS Direct. For further information, please contact Flagler
Communications Group at 561-832-4551. Please visit our website at
www.hnsglobal.com.
? (NOTE: This News Release may contain certain forward looking statements. Any
statements that are not statements of historical fact may be deemed to be
forward-looking statements. Without limitation, the words "intend," "projects,"
"plans," "believes," "expects," "anticipates" and similar expressions are
intended to identify forward-looking statements. There are a number of factors
that could cause the company's actual results - including, without limitation,
market acceptance of the ACUTRIM branded product as well as other products we
sell, loss of chain store accounts, increased competition, product and
technology changes and availability of the products we sell from our third-party
suppliers - to differ materially from those indicated by such forward looking
statements.) [GRAPHIC OMITTED] Contact:
Flagler Communications Group Inc., West Palm Beach
Jamie Dryer, 561/832-4551 or fax, 561/355-2388
jdryer@flaglercom.com
---------------------
or
Health And Nutrition Systems International, Inc.
561/863-8446 or fax, 561/863-9511
www.hnsglobal.com