UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
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DATE OF REPORT
(Date of Earliest Event Reported): July 7, 1999
NATURADE, INC.
(Exact Name of Registrant as Specified in Charter)
DELAWARE
(State or Other 33-7106-A 23-2442709
Jurisdiction of (Commission (IRS Employer
Incorporation) File Number) Identification No.)
14370 Myford Rd.
Irvine, California 92606
(Address of Principal Executive Offices)
Registrant's Telephone Number,
Including Area Code: (714) 573-4800
7110 East Jackson Street
Paramount, California 90723
(Former Address of Principal Executive Offices)
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Item 5. OTHER EVENTS
As reported previously, a civil judgment (the "Judgment") in the amount
of $2,744,000 was entered in March, 1999 against Naturade, Inc. ("Naturade") by
the United States Bankruptcy Court for the Northern District of Texas following
a bench trial in a proceeding styled Jeffrey H. Mims, Chapter 7 Trustee v.
Kennedy Capital, et al. The proceeding arose out of the bankruptcy case of
Performance Nutrition, Inc. ("PNI"), on whose behalf the Trustee was acting (the
"PNI Trustee").
Naturade and the PNI Trustee have entered into a settlement agreement,
which is subject to approval by the Bankruptcy Court. On July 7, 1999, the PNI
Trustee filed an application seeking Bankruptcy Court approval of the settlement
agreement. If approved, the settlement agreement will provide Naturade with a
full release of the Judgment and the costs and interest thereon, as well as any
and all other claims which the PNI Trustee has or might have against Naturade
(including a preference claim for approximately $130,000 filed in January 1999
by the PNI Trustee against Naturade). The settlement agreement requires Naturade
to deliver to the PNI Trustee (1) a cash payment of $1,350,000, (2) a promissory
note in the amount of $424,000 amortized over 12 months at 5% interest, and (3)
a contingent promissory note in the amount of $226,000, which will become
payable only to the extent that Naturade's sales for the second, third and
fourth quarters of 1999 exceed specified targets. The total cost to Naturade of
the settlement is expected to range between $1,774,000 and $2,000,000, exclusive
of interest on the promissory notes.
The Bankruptcy Court has scheduled a hearing on the PNI Trustee's
application to approve the settlement agreement for August 5, 1999. If the
settlement agreement is approved, it is anticipated that the parties will
consummate the terms of the settlement agreement before the end of August, 1999.
Naturade has preserved its right to appeal the Judgment in the event that the
Bankruptcy Court does not approve the settlement agreement.
The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for certain forward-looking statements. The statements contained in this
report that are not historical facts are forward-looking statements based on
Naturade's current expectations and beliefs concerning future developments and
their potential effects on Naturade. There can be no assurance that future
developments affecting Naturade will be those anticipated by Naturade. Actual
results may differ from those projected in the forward-looking statements. These
forward-looking statements involve significant risks and uncertainties (some of
which are beyond the control of Naturade) and are subject to change based upon
various factors. Naturade undertakes no obligation to publicly update or revise
any forward-looking statements, whether as the result of new information, future
events or otherwise. For a more detailed discussion of some of the ongoing risks
and uncertainties of Naturade's business, see Naturade's filings with the
Securities and Exchange Commission.
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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.
NATURADE, INC.
/s/ Lawrence J. Batina
By: -----------------------
Lawrence J. Batina,
Chief Financial Officer
Dated: July 8, 1999
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