As
filed with the Securities and Exchange Commission on September 25, 2006.
Registration
No. 333-137170
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
SB-2/A
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
BOND
LABORATORIES, INC.
|
|
|
Nevada
|
2833
|
20-3464383
|
(State
or Other Jurisdiction of
Incorporation
or Organization)Y
|
(Primary
Standard Industrial
Classification
Code Number)
|
(I.R.S.
Employer
Identification
No.)
|
|
|
777
S. Highway 101, Suite 215 Solana Beach, CA
|
92075
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Registrant’s
telephone number, including area code: 858-847-9000
(Name,
address, including zip code, and telephone number, including area code, of
agent
for service of process)
Copies
of communications to:
JOSEPH
I. EMAS
1224
WASHINGTON AVENUE
MIAMI
BEACH, FLORIDA 33139
TELEPHONE
NO.: (305) 531-1174
FACSIMILE
NO.: (305) 531-1274
Approximate
date of proposed sale to public:
From
time to time after the effective date of this registration statement.
If
this
form is filed to register additional securities for an offering pursuant to
Rule
462(b) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering.
¨
If
this
form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering.
¨
If
this
Form is a post-effective amendment filed pursuant to Rule 462(d) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering.
¨
If
delivery of the prospectus is expected to be made pursuant to Rule 434, please
check the following box.
¨
No
exchange or over the counter market exists for our common stock.
The
registrant hereby amends this registration statement on such date or dates
as
may be necessary to delay its effective date until the registrant shall file
a
further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this registration statement shall
become effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
CALCULATION
OF REGISTRATION FEE
Title
of each
Class
of
Securities
to
be
registered
|
|
Amount
to
be
Registered(1)
|
|
Proposed
Maximum
Offering
Price
per
share (2)
|
|
Proposed
Maximum
Aggregate
Offering
price
|
|
Amount
of
Registration
Fee
|
|
Common
|
|
|
1,000,000
|
|
$
|
2.00
|
|
$
|
2,000,000
|
|
$
|
215.
|
|
Common
stock, issuable upon exercise of warrants
|
|
|
1,000,000
|
|
$
|
3.00
|
|
$
|
3,000,000
|
|
$
|
321.
|
|
Units
|
|
|
1,000,000
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
$
|
536.
|
*
|
*Previously
paid.
Pursuant
to Rule 416, there are also being registered such indeterminable additional
securities as
may
be
issued to prevent dilution resulting from stock splits, stock dividends or
similar transactions as a
result
of
the adjustment provisions contained in the warrants.
No
exchange or over-the-counter market exists for First Corporation’s common stock.
The offering price was arbitrarily established by management and does not
reflect market value, assets or any established criteria of
valuation.
THE
INFORMATION CONTAINED IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
THESE SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED WITH
THE
SECURITIES AND EXCHANGE COMMISSION IS DECLARED EFFECTIVE. THIS PROSPECTUS IS
NOT
AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY
THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT
TO COMPLETION, DATED SEPTEMBER ___, 2006
PROSPECTUS
BOND
LABORATORIES, INC.
1,000,000
SHARES OF OUR COMMON STOCK
Bond
Laboratories, Inc. (“we”, “us”, “our” or the “Bond Laboratories”) is offering
for sale, on a self- underwritten basis, up to 1,000,000 units (“Units”) each
unit consisting of one share of our common stock and one warrant to purchase
shares of our common stock at $3.00 per share, at a price of $2.00 per Unit..
There is no minimum number of shares we will sell. Proceeds from the sale of
the
shares will be deposited in our operating account and there will be no refunds.
This offering will continue for a period of 180 days from the effective date
of
this prospectus and may be terminated sooner in our sole discretion. There
are
no minimum share purchase requirements for individual investors.
Investing
in our securities involves risk,
see
“Risk
Factors”
page 4
. Any investor who cannot afford to
sustain the total loss of their investment should not purchase the securities
offered herein. Neither the Securities and Exchange Commission, nor any state
securities commission has approved or disapproved of these securities or
determined if this prospectus is truthful or complete. Any representation to
the
contrary is a criminal offense.
This
is
our initial public offering. No public market currently exists for our shares,
although we intend to apply for listing on the Over-the-Counter Bulletin Board
in the future. We know of no market makers for our common stock. The offering
price may not reflect the market price of our shares after the offering. The
shares will be offered and sold by our officers and directors without any
discounts or other commissions. We currently have no agreements, arrangements
or
understandings with any broker/dealers to sell shares.
|
|
Price
to
public
|
|
Underwriting
Discounts and
Commissions (1)
|
|
Proceeds
to
Company (1) (2)
|
|
Per
Unit
|
|
$
|
2.00
|
|
$
|
0
|
|
$
|
2.00.
|
|
Total
Maximum
|
|
$
|
2,000,000
|
|
$
|
0
|
|
$
|
2,000,000
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|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
We
plan to have our officers offer and sell the shares. They will receive
no
discounts or commissions. We do not have any agreements or understandings
with any broker/dealers, although we may, at our discretion, retain
such
to assist in the offer and sale of units. In such event, we will
update
this prospectus accordingly.
|
(2)
|
Proceeds
to us are shown before deducting offering expenses payable by us
estimated
at $15,000 including legal and accounting fees and printing costs.
|
Our
common stock is presently not traded on any market or securities exchange.
Neither
the Securities and Exchange Commission nor any state securities commission
has
approved or disapproved of these securities or passed upon the adequacy or
accuracy of this prospectus. Any representation to the contrary is a criminal
offense.
All
dealers that effect transactions in these securities whether or not
participating in this offering may be required to deliver a prospectus. This
is
in addition to the dealer’s obligation to deliver a prospectus when acting as
underwriters and with respect to their unsold allotments or subscriptions.
The
Date of this Prospectus is: September ___, 2006
TABLE
OF CONTENTS
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PAGE
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|
Prospectus
Summary
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1
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The
Offering
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2
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Summary
Financial Data
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3
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Risk
Factors
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4
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Where
You Can Find More Information
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10
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Use
of Proceeds
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|
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11
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Determination
of Offering Price
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11
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Dividends
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11
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Dilution
|
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12
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Comparative
Data
|
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12
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Plan
of Distribution
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13
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Penny
Stock Rules / Section 15(g) of the Exchange
Act
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14
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Legal
Proceedings
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14
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Directors,
Executive Officers and Control Persons
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15
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Executive
Compensation
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|
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16
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Security
Ownership of Certain Beneficial Owners and
Management
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17
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|
Description
of Securities
|
|
|
17
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|
Disclosure
of Commission Position of Indemnification for Securities Act
Liabilities
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18
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Certain
Relationships and Related Transactions
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19
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Organization
within Last Five Years
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19
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Description
of Business
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19
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Management’s
Discussion and Analysis or Plan of Operation
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28
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Summary
of Significant Accounting Policies
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31
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Description
of Property
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32
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Market
for Common Equity and Related Stockholder Matters
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32
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Interests
of
Named Experts and Counsel
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33
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|
Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure
|
|
|
33
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|
Additional
Information
|
|
|
33
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|
PROSPECTUS
SUMMARY
This
summary highlights important information about our company and business. Because
it is a summary, it may not contain all of the information that is important
to
you. To understand this offering fully, you should read this entire prospectus
and the financial statements and related notes included in this prospectus
carefully, including the “Risk Factors” section. Unless the context requires
otherwise, “we,” “us,” “our”, “ and the “Company” and similar terms refer to
Bond Laboratories, Inc., and our subsidiaries collectively, while the term
“Bond
Laboratories” refers to Bond Laboratories Inc.
We
were
incorporated under the laws of the State of Nevada in May, 2005 to build a
turn-key Nutraceutical Dietary Supplement business catering to all five of
the
major distribution channels; (Specialty Retail, Warehouse Clubs,
Grocery/Convenience Store/Private Label, Direct to Consumer, Multi-Level
Marketing), focusing on the three major categories of the industry; (Energy,
Pain Relief and Weight loss), and utilizing a state of the art, alternative
delivery method.
Where
You Can Find Us
Our
principal executive offices are located at 777 S. Highway 101 Suite 215, Solana
Beach, CA 92075. Our telephone number is (858) 847-9000.
About
Our Business
Bond
Laboratories is building a turn-key Nutraceutical Dietary Supplement business
catering to all five of the major distribution channels focusing on the three
major categories of the industry; Energy, Pain Relief and Weight loss, utilizing
state of the art, alternative delivery methods vs. antiquated capsules and
pills.
The
opportunity to create a successful, financially rewarding functional foods
company has never been better. Consumers of dietary supplements and functional
foods have an unquenchable hunger for innovative, effective products and the
market clearly indicates consumer willingness to spend money on value-added
products such as energy drinks, energy bars, and novel functional foods that
offer solutions to health problems. In fact, Datamonitor (DTM.L), London, U.K.,
has recently released a new report entitled “Evolution of Global Consumer
Trends,” identifying ‘Health’ and ‘Convenience’ as 2 of the top 10 global trends
influencing consumer buying behavior in Europe, North America, Latin American
and Asia-Pacific.
Health:
there is
a growing recognition that physical and mental wellbeing matter. Statistics
show
that an overwhelming majority of European and U.S. consumers feel that improving
their health is important. Even more significant is that 64% of Europeans and
U.S. consumers actually took "steps" to improve their health during 2003-04.
Datamonitor also identifies the crossover trend of health and convenience
(health on-the-go) as an under-targeted opportunity with high growth potential.
Convenience:
the
demand for easier, faster and disposable products. Convenience, time saving
products, and “quick fixes” are important to 82% of European and U.S. consumers.
Convenience is also impacting personal care consumption; 57% of European and
U.S. consumers report that they groom while on-the-move and 58% admit to
grooming at-work. Bond Laboratories is ideally positioned to leverage the
opportunity of providing products to this broad consumer base.
Bond
will
initially be developing proprietary formulated products that address the three
largest mega-categories; Energy, Pain Relief and Weight-loss. Within these
mega-niches, Bond is focusing its product development, marketing, and sales
initiatives on unique marketing subgroups within the mega-categories. An example
of such an opportunity and the first focus of Bond Laboratories is the exploding
energy drink market. New concepts and strong marketing have driven the global
energy drinks market into the mainstream. Consumption leaped by 18 per cent
in
2004 to 2,410 million liters, according to the new 2005 Global Energy Drinks
report from specialist drinks consultancy Zenith International. And new
innovations, which have been a driving factor, continue to feature strongly
in
this segment.
The
concept of caffeine based 'body and mind stimulating' energy drinks originates
from Japan and Thailand. Although Asia Pacific remains the top region, with
a 58
per cent share of total volume in 2004, its lead is expected to decline as
other
areas develop. North America for example has just overtaken West Europe to
hold
the next largest share at 15 per cent. From small beginnings, its average growth
since 1999 has been an impressive 68 per cent a year. The United States is
expected to become the largest national market by 2009.
The
Company has a focused vision, talented executive leadership, excellent product
innovation capabilities, significant manufacturing experience, and the potential
to attain success within the functional food marketplace. The executive team
is
comprised of experienced businessmen who have been instrumental in creating
products that have been profitably marketed in the food, drug and mass sectors
(FDM), multi level marketing sector (MLM,) club/warehouse store sector,
direct-to-consume sector (DTC,) contract manufacturing sector, and Rx/OTC
marketplace sectors. These products were successful in achieving substantially
higher margins than most other consumer products categories and we believe
that
this team will bring the same success and results to Bond Laboratories’
products.
THE
OFFERING
Company
|
|
Bond
Laboratories, Inc.
|
|
|
|
Securities
Being Offered
to
New Investors
|
|
Up
to 1,000,000 units (“Units”) each unit consisting of one share of our
common stock and one warrant to purchase shares of our common stock
at
$3.00 per share, at a price of $2.00 per Unit...
|
|
|
|
Offering
Price
|
|
We
are offering our Units at a price of $2.00 per Unit. We determined
this
offering price arbitrarily based upon managements’ assessment of the value
of the common stock.
|
|
|
|
Terms
of the Offering
|
|
We
are offering our shares for a period not to exceed 180 days following
the
effective date of this registration.
|
|
|
|
Securities
Outstanding
|
|
We
are authorized to issue 75,000,000 shares of common stock, $.01 par
value,
of which 5,000,000 shares are currently issued and outstanding. We
are
authorized to issue 10,000,000 shares of preferred stock, $.01 par
value,
of which 5,000,000 have been issued or are outstanding.
|
|
|
|
Use
of Proceeds
|
|
We
will receive the proceeds from the offering; see “Use of
Proceeds.”
|
SUMMARY
OF FINANCIAL DATA
(In
thousands, except per share amounts)
The
summary of financial data as of and for the years ended December 31, 2005
is derived from and should be read in conjunction with our audited financial
statements for the year ended December 31, 2005, including the notes to
those financial statements, which are included elsewhere in this registration
statement along with the section titled “Management’s Discussion and Analysis or
Plan of Operation”. The summary of financial data is derived from and should be
read in connection with unaudited financial statements and notes to financial
statements for six-months ended June 30, 2006 and December 31,
2005.
|
|
Six-months
period ended June 30,
|
|
July
26,
2005
(Inception)
Through
June
30,
|
|
Year
ended December 31,
|
|
July
26,
2005
(Inception)
Through
December 31,
|
|
|
|
2006
|
|
2005
|
|
2006
|
|
2005
|
|
2005
|
|
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
Net
sales
|
|
$
|
4,440
|
|
$
|
-
|
|
$
|
4,440
|
|
$
|
-
|
|
$
|
-
|
|
Costs
and Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
of Sales
|
|
|
3,166
|
|
|
-
|
|
|
3,166
|
|
|
-
|
|
|
-
|
|
Research
and development
|
|
|
24,421
|
|
|
-
|
|
|
36,344
|
|
|
11,923
|
|
|
11,923
|
|
General
and administrative
|
|
|
151,942
|
|
|
-
|
|
|
292,141
|
|
|
140,199
|
|
|
140,199
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense, net
|
|
|
6,678
|
|
|
-
|
|
|
8,291
|
|
|
1,613
|
|
|
1,613
|
|
Net
loss
|
|
|
(181,768
|
)
|
|
-
|
|
|
(335,803
|
)
|
|
(153,735
|
)
|
|
(153,735
|
)
|
Basic
and diluted loss per common share
|
|
|
(90.88
|
)
|
|
-
|
|
|
(167.90
|
)
|
|
(76.87
|
)
|
|
|
|
Weighted
average number of shares outstanding - basic and diluted
|
|
|
2,000
|
|
|
-
|
|
|
2,000
|
|
|
2,000
|
|
|
2,000
|
|
Risk
Factors
Before
you invest in our Share, you should be aware of various risks, included those
described below. You should consider carefully these risks together with all
other information included in this memorandum before you decide to purchase
our
Share. Any or all of these risks could have a material adverse impact on our
present and future business, results of operations and financial condition.
These risks below may not be exhaustive of all risks. Keep these risk factors in
mind when you read forward-looking statements elsewhere in this memorandum.
These are statements which relate to our expectations for future events and
time
periods. Generally, the words "anticipate," "expect," "intend" and similar
expressions identify forward looking statements. Forward looking statements
involve risks and uncertainties, and future events and circumstances could
differ significantly from those anticipated in the forward looking
statements.
Our
actual operating results and financial performance may prove to be very
different from what we might have predicted as of the date of this
Memorandum.
AN
INVESTMENT IN OUR SHARES INVOLVES A HIGH DEGREE OF RISK AND SHOULD ONLY BE
MADE
BY INVESTORS WHO CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT. YOU SHOULD
CAREFULLY CONSIDER THE RISKS AND UNCERTAINTIES DESCRIBED BELOW AND OTHER
INFORMATION IN THIS BEFORE DECIDING TO INVEST IN OUR SHARES.
THE
RISKS
AND UNCERTAINTIES DESCRIBED BELOW ARE NOT THE ONLY ONES FACING US. ADDITIONAL
RISKS AND UNCERTAINTIES NOT PRESENTLY KNOWN TO US MAY ALSO IMPAIR OUR BUSINESS
OPERATIONS.
IF
ANY OF
THE FOLLOWING RISKS ACTUALLY OCCUR, OUR BUSINESS COULD BE MATERIALLY ADVERSELY
AFFECTED. IN SUCH CASE, YOU MAY LOSE ALL OR PART OF YOUR INVESTMENT. THE
INFORMATION IN THIS MEMORANDUM IS COMPLETE AND ACCURATE AS OF THE DATE ON THE
FRONT COVER OF THIS MEMORANDUM, BUT THE INFORMATION MAY CHANGE AFTER SUCH
DATE.
Lack
of Prior Operations
Bond
Laboratories, Inc., was formed to pursue the development and marketing of
products in the nutraceutical dietary supplement business. The Company’s
business continues to be subject to all of the risks inherent in the
establishment of a new business enterprise. The Company’s ability to succeed may
be hampered by the expenses, difficulties, complications and delays frequently
encountered in connection with the formation and commencement of operations
of a
new business. These include, but are not limited to, the possibility that an
insufficient market for the Company’s products will develop. In view of the
foregoing, the Company cannot provide any assurance that the Company will be
successful in its proposed activities or that its operations will ultimately
be
profitable.
Development
Stage of Business
The
Company is in an early stage of its development, which by its nature involves
a
substantial risk. The Company’s management team and key advisors have
significant experience in their respective fields; however, they have not worked
together for an extended period of time. Furthermore, the Company’s success will
depend in large part on the continued service of its key management, technical,
sales and marketing personnel and on its ability to continue to attract highly
qualified managers and employees. If the Company is unable to recruit and retain
qualified personnel, the Company may be adversely affected. There can be no
assurance that key personnel will remain with the Company.
Additional
Financing
Additional
equity or debt financing may be necessary. There is no assurance that such
financing will be available or, if it is, that it will be on terms advantageous
to the Company.
Competition
Currently
Bond
Laboratories will inevitably encounter competition in each market that it
enters. Trademarks and Patent applications that cover new embodiments of the
technology and formulations will be pursued wherever possible. While the Company
cannot assure that the trademark and patent applications will block competitive
products, they should help the subsidiaries become the leader in their
marketplaces. However, there can be no assurance that companies with greater
financial, marketing and other resources will not enter the marketplace to
compete with the Company, or that if they do, the Company will be able to
compete effectively, those protections notwithstanding.
Protection
of Proprietary Rights
The
Company believes that its trademarks, patents and other proprietary rights
are
important to its success and its competitive position. Accordingly, the Company
devotes substantial resources to the establishment and protection of its
proprietary rights on a worldwide basis. Nevertheless, there can be no assurance
that the actions taken by the Company to establish and protect its proprietary
rights will be adequate either to prevent imitation of its products by others
or
to prevent others from seeking to block sales of the Company’s products as
violative of the proprietary rights of others. No assurance can be given that
others will not assert rights in, or ownership of, trademarks and other
proprietary rights of the Company. In addition, the laws of certain foreign
countries do not protect proprietary rights to the same extent as do the laws
of
the United States, with the result that patents do not offer substantial
protection in those countries.
International
Operation
The
Company is seeking to establish an international sales base some time in the
future. International operations and exports to foreign markets are subject
to
all of the risks generally associated with doing business abroad, such as
foreign government regulation, economic conditions, currency fluctuations,
duties and taxes, political unrest and disruptions or delays in shipments.
These
factors, among others, could influence the Company’s ability to sell its
merchandise in international markets. If any such factors were to render the
conduct of the business in a particular country undesirable or impracticable,
there could be a material adverse effect on the Company’s business, financial
condition and results of operations. In addition, the majority of the Company’s
sales are derived from the U.S., and most of the Company’s current information
on buying patterns and customer preferences are based on its customers in the
U.S. As a result, predicting foreign consumer demand may be more difficult
for
the Company than predicting U.S. consumer preferences, and there can be no
assurance that the Company’s merchandise or marketing efforts will be successful
in foreign markets.
Technological
Changes and Uncertainty
The
Company is involved in the creation, production, and distribution of
nutraceutical dietary supplement products. Marketing such products requires
extensive research efforts, yet there relative attractiveness in the marketplace
can be affected by rapid technological change. New developments in this area
are
expected to continue at a rapid pace in both industry and academia. There can
be
no assurance that research will not lead to discoveries by others that are
more
effective than those of the Company, or that such research and discoveries
by
others will not render some or all of the Company’s programs, services or
products noncompetitive or obsolete. No assurance can be given that unforeseen
problems will not develop with the technologies or applications used by the
Company or that the Company’s products and services will ultimately be
commercially feasible.
Loss
on Dissolution and Termination
In
the
event of dissolution of the Company, the proceeds from the liquidation of its
assets, if any, will be first used to satisfy the claims of creditors. There
is
no assurance that the Company’s assets would be sufficient to satisfy creditors’
claims in full. Only after all outstanding debts are satisfied will the
remaining proceeds, if any, be distributed to the Share holders. Accordingly,
Share holders’ ability to recover all or any portion of their investment under
such circumstances will depend on the amount of proceeds that the Company
realizes from liquidation of its assets.
Discretion
in the Use of Proceeds
A
substantial portion of the net proceeds of this Offering will be used for the
marketing and production of the Company’s product, working capital and other
general corporate purposes. Accordingly, management will have broad discretion
as to the specific application of a significant portion of the net
proceeds.
There
is limited business and financial information publicly
available
to
you regarding our business.
Because
we have limited operations there is limited public information available
regarding our current business.
We
are subject to the Foreign Corrupt Practices Act
To
the
extent that we sell our products outside the U.S., we are subject to the Foreign
Corrupt Practices Act which makes it unlawful for any issuer to corruptly pay
or
offer to pay, any money or anything of value to any foreign official, foreign
political party or official thereof or any candidate for foreign political
office ("Foreign Officials") or any person with knowledge that all or a portion
of such money or thing of value will be offered, given, or promised, directly
or
indirectly, to any Foreign Official.
While
we
have not made any offers, payments, promises to pay, or authorization of any
money or anything of value to any foreign officials, we have implemented a
policy to be followed by the officers, directors, employees and anyone acting
on
our behalf, that no such payments can and will be made. We have made all
employees cognizant of the need for compliance with the Foreign Corrupt
Practices Act and any violation of our policy will result in dismissal. Further,
we conduct periodic reviews of this policy with all employees to ensure full
compliance.
Risks
Involving Foreign Markets; Foreign Currency Fluctuations.
We
anticipate our business will extend to the sale of products in foreign markets.
Potential future foreign markets have different regulations related to the
environment, labor relations, currency fluctuations, exchange controls, customs,
foreign tax increases, import and export, investment and taxation which will
also subject us to increased regulation costs and possibly fines or restrictions
on conducting our operations. Currency fluctuations may have an effect on our
current activities, in that revenues are generally tied to the U.S. dollar.
A
weakening of the U.S. dollar (or other foreign currencies) may have an adverse
material effect on the financial condition of the Company.
Future
expansion.
We
plan
on expanding our business. We may be competing with other corporations, many
of
which may have greater resources than we do. In addition, any internally
generated growth experienced by us could place significant demands on our
management, thereby restricting or limiting our available time and opportunity
to identify and evaluate potential future opportunities.
No
Investors’ Counsel
The
Company has not retained any independent professionals to review or comment
on
this Offering or otherwise protect the interests of the investors hereunder.
Although the Company has retained its own counsel, neither that law firm nor
any
other law firm has made, on behalf of the investors, any investigation of the
merits or the fairness of this Offering or of any factual matters represented
herein, and purchasers of the Company’s securities should not rely on the law
firm so retained with respect to any matters herein described. Prior to making
an investment in the Company, all potential investors should consult with their
own legal, financial and tax advisers.
Indemnification
Our
officers and directors are entitled to indemnification, except under certain
circumstances, from the Company. The obligation of the Company to fund any
indemnification will survive the dissolution of the Company.
Risks
Related To Our Business
Because
we have a limited operating history, it will be difficult for you to evaluate
our business.
Bond
Laboratories is a development stage company that was incorporated in May, 2005.
We have only conducted operations since 2005. Our future operations are
contingent upon increasing revenues and raising capital for expansion to advance
research, marketing, and distribution. Because we have a limited operating
history you will have difficulty evaluating our business and future prospects.
You should consider our prospects in light of the risks, uncertainties, expenses
and difficulties we will face as an emerging business.
We
have a history of losses
We
are in
the development stage and have incurred substantial losses since our inception,
including net losses of $181,768 for six-months ended June 30, 2006 and $153,735
for the year ended December 31, 2005 respectively, and we had an
accumulated deficit of $335,503 at June 30, 2006. Substantial losses to date
have resulted principally from costs incurred in general and administrative
expenses and research and development activities. We incurred $149,047 of
general and administrative expenses for the six months ended June 30, 2006
and
$140,199 for the year ended December 31, 2005. For six-months ended June 30,
2006 and for the year ended December 31, 2005 we incurred research and
development expenses of $24,421 and $11,923, respectively. In order to develop,
test, produce and commercialize our products, we will need to conduct
significant research, development, testing and regulatory compliance activities
which, together with projected general and administrative expenses, are expected
to result in additional significant continuing operating losses. We expect
that
we will continue incurring a loss until, at the earliest, we generate sufficient
revenue to offset the cost of our operations, including our continuing product
development efforts. Our future revenue levels and potential profitability
depend on many factors, including the demand for our existing product
candidates, our ability to develop new product candidates and our ability to
control costs. Further, as a development stage company, we have a limited
relevant operating history of which an evaluation of our prospects can be made.
Such prospects must be considered in light of the risks, expenses and
difficulties frequently encountered in establishing a new business in the
evolving, heavily regulated biotechnology industry, which is characterized
by an
increasing number of market entrants, intense competition and high failure
rate.
In addition, significant challenges are often encountered by businesses shifting
from development to commercial activities
If
we are
unable to obtain financing to support our future growth plans, we will have
to
curtail our operations and our growth plans, which will negatively affect the
value of your investment.
Our
Plan
of Operations involves substantial research, development, and marketing costs
in
an amount of approximately $2,000,000 to fulfill our strategic goal that is:
to
develop nutraceutical dietary supplement products and to expand existing
formulations to other “niche” markets.
We
are
dependent upon the proceeds from this offering as well as future financing
efforts to implement our Plan of Operations and to expand our business. In
addition, we may need additional funding from bank financing or financing from
a
debt or equity offering. If we are unable to obtain financing when needed on
favorable terms, we may be forced to curtail our operations and our growth
plans, which will negatively affect the value of your investment.
If
we lose our key personnel, our business and prospects may be adversely affected.
Our
performance is dependent on the services of certain key employees. The loss
of
services of any of our key employee could have a material adverse effect on
our
business and financial condition. We may not be able to hire and retain other
management if we lose the services of our key employees.
We
may need additional capital.
Our
capital requirements in connection with our operations will be substantial.
Our
management anticipates that we will require additional working capital in the
future even if we raise the maximum amount in this offering. Further, even
if
available, additional equity or convertible debt financing, if used, could
result in substantial dilution of shareholder interests. Currently, our plan
of
operation includes looking for private capital after we become a reporting
company.
Risks
Related To This Offering
Our
shares will be “Penny Stocks” which are subject to certain restrictions that
could adversely affect the liquidity of an investment in us.
We
intend
to initially trade our common stock in the over-the-counter market. The stock
price will likely be at less than $5.00 per share. Such shares are referred
to
as “penny stocks” within the definition of that term contained in Rules 15g-1
through 15g-9 promulgated under the Securities Exchange Act of 1934, as amended.
These rules impose sales practices and disclosure requirements on certain
broker-dealers who engage in certain transactions involving penny stocks. These
additional sales practices and disclosure requirements could impede the sale
of
our securities, including securities purchased herein, in the secondary market.
In general, penny stocks are low priced securities that do not have a very
high
trading volume. Consequently, the price of the stock is volatile and you may
not
be able to buy or sell the stock when you want. Accordingly, the liquidity
for
our securities may be adversely affected, with related adverse effects on the
price of our securities.
Under
the
penny stock regulations, a broker-dealer selling penny stocks to anyone other
than an established customer or “accredited investor” (generally, an individual
with a net worth in excess of $1,000,000 or annual income exceeding $200,000
or
$300,000 together with his or her spouse) must make a special suitability
determination for the purchaser and must receive the purchaser’s written consent
to the transaction prior to the sale, unless the broker-dealer is otherwise
exempt. In addition, unless the broker-dealer or the transaction is otherwise
exempt, the penny stock regulations require the broker-dealer to deliver, prior
to any transaction involving a penny stock, a disclosure schedule prepared
by
the Securities and Exchange Commission relating to the penny stock. A
broker-dealer is also required to disclose commissions payable to the
broker-dealer and the Registered Representative and current quotations for
the
securities. A broker-dealer is additionally required to send monthly statements
disclosing recent price information with respect to the penny stock held in
a
customer’s account and information with respect to the limited market in penny
stocks.
There
is no public market for our common stock, and even if a market develops, it
will
likely be thin and subject to manipulation.
Our
common stock is not listed on any exchange or quoted on any similar quotation
service, and there is currently no public market for our common stock. We have
not taken any steps to enable our common stock to be quoted on the OTC Bulletin
Board, and our common stock may never be quoted on any quotation service or
that
any market for our common stock will ever develop. As a result, stockholders
may
be unable to liquidate their investments, or may encounter considerable delay
in
selling shares of our common stock. We have not engaged an underwriter for
this
offering, and we cannot assure you that any brokerage firm will act as a market
maker of our securities. A trading market may not develop in the future, and
if
one does develop, it may not be sustained. If an active trading market does
develop, the market price of our common stock is likely to be highly volatile
due to, among other things, the nature of our business and because we are a
new
public company with a limited operating history. Further, even if a public
market develops, the volume of trading in our common stock will presumably
be
limited and likely be dominated by a few individual stockholders. The limited
volume, if any, will make the price of our common stock subject to manipulation
by one or more stockholders and will significantly limit the number of shares
that one can purchase or sell in a short period of time. The market price of
our
common stock may also fluctuate significantly in response to the following
factors, most of which are beyond our control:
·
variations
in our quarterly operating results;
·
changes
in securities analysts’ estimates of our financial performance;
·
changes
in general economic conditions and in the healthcare industry;
·
changes
in market valuations of similar companies;
·
announcements
by us or our competitors of significant new contracts with artists,
acquisitions, strategic partnerships or joint ventures, or capital commitments;
·
loss
of a
major customer, partner or joint venture participant; and
·
the
addition or loss of key managerial and collaborative personnel.
The
equity markets have, on occasion, experienced significant price and volume
fluctuations that have affected the market prices for many companies’ securities
and that have often been unrelated to the operating performance of these
companies. Any such fluctuations may adversely affect the market price of our
common stock, regardless of our actual operating performance. As a result,
stockholders may be unable to sell their shares, or may be forced to sell them
at a loss.
Obtaining
additional capital through the future sale of common stock and derivative
securities will result in dilution of stockholder interests.
We
plan
to raise additional funds in the future by issuing additional shares of common
stock or securities such as convertible notes, options, warrants or preferred
stock that are convertible into common stock. Any such sale of common stock
or
other securities will lead to further dilution of the equity ownership of
existing holders of our common stock.
If
a market for our common stock develops, the market price for our common shares
is particularly volatile given our status as a relatively unknown company with
a
small and thinly traded public float, limited operating history and lack of
profits which could lead to wide fluctuations in our share price. The price
at
which you purchase our common shares may not be indicative of the price that
will prevail in the trading market. You may be unable to sell your common
shares, at or above your purchase price, which may result in substantial losses
to you.
Our
operating results are likely to fluctuate significantly in the future due to
a
variety of factors, many of which are outside of our control. If market for
our
common stock develops and our operating results fluctuate negatively in any
future quarter, the volatility in our share price is attributable to a number
of
factors. First, as noted above, our common shares are sporadically and thinly
traded. As a consequence of this lack of liquidity, the trading of relatively
small quantities of shares by our shareholders may disproportionately influence
the price of those shares in either direction. The price for our shares could,
for example, decline precipitously in the event that a large number of our
common shares are sold on the market without commensurate demand, as compared
to
a seasoned issuer which could better absorb those sales without adverse impact
on its share price. Secondly, we are a speculative or “risky” investment due to
our limited operating history and lack of profits to date, and uncertainty
of
future market acceptance for our potential products. As a consequence of this
enhanced risk, more risk-adverse investors may, under the fear of losing all
or
most of their investment in the event of negative news or lack of progress,
be
more inclined to sell their shares on the market more quickly and at greater
discounts than would be the case with the stock of a seasoned issuer. Many
of
these factors are beyond our control and may decrease the market price of our
common shares, regardless of our operating performance. We cannot make any
predictions or projections as to what the prevailing market price for our common
shares will be at any time, including as to whether our common shares will
sustain their current market prices, or as to what effect that the sale of
shares, or the availability of common shares for sale at any time, will have
on
the prevailing market price.
Shareholders
should be aware that, according to SEC Release No. 34-29093, the market for
penny stocks has suffered in recent years from patterns of fraud and abuse.
Such
patterns include (1) control of the market for the security by one or a few
broker-dealers that are often related to the promoter or issuer;
(2) manipulation of prices through prearranged matching of purchases and
sales and false and misleading press releases; (3) boiler room practices
involving high-pressure sales tactics and unrealistic price projections by
inexperienced sales persons; (4) excessive and undisclosed bid-ask
differential and markups by selling broker-dealers; and (5) the wholesale
dumping of the same securities by promoters and broker-dealers after prices
have
been manipulated to a desired level, along with the resulting inevitable
collapse of those prices and with consequent investor losses. Our management
is
aware of the abuses that have occurred historically in the penny stock market.
Although we do not expect to be in a position to dictate the behavior of the
market or of broker-dealers who participate in the market, management will
strive within the confines of practical limitations to prevent the described
patterns from being established with respect to our securities. The occurrence
of these patterns or practices could increase the volatility of our share price.
To
date, we have not paid any cash dividends and no cash dividends will be paid
in
the foreseeable future.
We
do not
anticipate paying cash dividends on our common shares in the foreseeable future.
We may not have enough funds to legally pay dividends. Even if funds are legally
available to pay dividends, we may nevertheless decide in our sole discretion
not to pay dividends.
Volatility
in our common share price may subject us to securities litigation, thereby
diverting our resources that may have a material adverse effect on our results
of operations.
As
discussed in the preceding risk factor, the market for our common shares is
characterized by significant price volatility when compared to seasoned issuers,
and we expect that our share price will continue to be more volatile than a
seasoned issuer for the indefinite future. In the past, plaintiffs have often
initiated securities class action litigation against a company following periods
of volatility in the market price of its securities. We may in the future be
the
target of similar litigation. Securities litigation could result in substantial
costs and liabilities and could divert management’s attention and resources.
We
are subject to the certain anti-takeover provisions under Nevada law, which
could discourage or prevent a potential takeover of our company that might
otherwise result in you receiving a premium over the market price for your
common shares.
As
a
Nevada corporation, we are subject to certain provisions of the Nevada Business
Corporation Law anti-takeover rules and may inhibit a non-negotiated merger
or
other business combination. These provisions are intended to encourage any
person interested in acquiring us to negotiate with, and to obtain the approval
of, our Board of Directors in connection with such a transaction. However,
certain of these provisions may discourage a future acquisition of us, including
an acquisition in which the shareholders might otherwise receive a premium
for
their shares. As a result, shareholders who might desire to participate in
such
a transaction may not have the opportunity to do so.
The
trading price of our common stock may decrease due to factors beyond our
control.
The
stock
market from time to time has experienced extreme price and volume fluctuations,
which have particularly affected the market prices for emerging growth companies
and which often have been unrelated to the operating performance of the
companies. These broad market fluctuations may adversely affect the market
price
of our common stock. If our shareholders sell substantial amounts of their
common stock in the public market, the price of our common stock could fall.
These sales also might make it more difficult for us to sell equity, or equity
related securities, in the future at a price we deem appropriate.
We
have broad discretion in the use of the net proceeds from this offering and
may
not use them effectively
.
We
will
have broad discretion in the application of the net proceeds from this offering
and could spend the proceeds in way that do not improve our results of
operations or enhance the value of our common stock. Our failure to apply these
funds effectively could have a material adverse effect on our business, delay
the development of our products and services and cause the price of our common
stock to decline.
If
you purchase our common stock in this offering, you will incur immediate and
substantial dilution in the book value of your shares.
The
assumed initial public offering price of our common stock is substantially
higher than the net tangible book value per share of our common stock. Investors
purchasing common stock in this offering will pay a price per share that
substantially exceeds the book value of our tangible assets after subtracting
liabilities. As a result, investors purchasing common stock in this offering
will incur immediate dilution of price per share. If the holders of outstanding
options or warrants exercise those options or warrants, you will suffer further
dilution.
We
will incur increased costs as a result of being a public company, which could
adversely affect our operating results.
As
a
public company, we will incur significant legal, accounting and other expenses
that we did not incur as a private company. In addition, the Sarbanes-Oxley
Act
of 2002 and the new rules subsequently implemented by the Securities and
Exchange Commissions, the NASDAQ National Market and the Public Company
Accounting Oversight Board have imposed various new requirements on public
companies, including requiring changes in corporate governance practices. We
expect these rules and regulations to increase our legal and financial
compliance costs and to make some activities more time-consuming and costly.
We
also expect these new rules and required to incur substantial costs to obtain
the same or similar coverage. These costs could materially adversely affect
our
results of operations.
Forward-Looking
Statements
This
prospectus includes forward-looking statements that involve risks and
uncertainties. These forward-looking statements include statements under the
captions “Prospectus Summary,” “Risk Factors,” “Use of Proceeds,” “Management’s
Discussion and Analysis of Financial Condition and Results of Operations,”
“Business” and elsewhere in this prospectus. You should not rely on these
forward-looking statements which apply only as of the date of this prospectus.
These statements refer to our future plans, objectives, expectations and
intentions. We use words such as “believe,” “anticipate,” “expect,” “intend,”
“estimate” and similar expressions to identify forward-looking statements. This
prospectus also contains forward-looking statements attributed to third parties
relating to their estimates regarding the growth of certain markets. You should
not place undue reliance on these forward-looking statements, which apply only
as of the date of this prospectus. Our actual results could differ materially
from those discussed in these forward-looking statements. Factors that could
contribute to these differences include those discussed in the preceding pages
and elsewhere in this prospectus.
Risks
associated with forward-looking statements.
This
prospectus contains certain forward-looking statements regarding management’s
plans and objectives for future operations, including plans and objectives
relating to our planned marketing efforts and future economic performance.
The
forward-looking statements and associated risks set forth in this prospectus
include or relate to:
(1)
Our
ability to obtain a meaningful degree of consumer acceptance for our products
now and in the future,
(2)
Our
ability to market our products on a global basis at competitive prices now
and
in the future,
(3)
Our
ability to maintain brand-name recognition for our products now and in the
future,
(4)
Our
ability to maintain an effective distributors network,
(5)
Our
success in forecasting demand for our products now and in the future,
(6)
Our
ability to maintain pricing and thereby maintain adequate profit margins,
(7)
Our
ability to achieve adequate intellectual property protection and
(8)
Our
ability to obtain and retain sufficient capital for future operations.
WHERE
YOU CAN FIND MORE INFORMATION
We
have
filed a registration statement with the U.S. Securities and Exchange Commission,
or the SEC, on Form SB-2 under the Securities Act to register the shares of
our
common stock being offered by this prospectus. This prospectus omits some
information contained in the registration statement and its exhibits, as
permitted by the rules and regulations of the SEC. For further information
about
us and our securities, you should review the registration statement and its
exhibits, which may be inspected, without charge, at the SEC’s public reference
facilities at, Judiciary Plaza, 100 F Street, N.E., Room 1580, Washington,
D.C.
20549. Copies of all or any portion of the registration statement may be
obtained from the public reference facilities of the SEC on payment of
prescribed fees. Please call the SEC at 1-800-SEC-0330 for further information
regarding the public reference facilities. The SEC maintains a website,
http://www.sec.gov, that contains reports, proxy statements and information
statements and other information regarding registrants that file electronically
with the SEC, including the registration statement.
Statements
in this prospectus as to the contents of any contract or other document referred
to in this prospectus are not necessarily complete and, in each instance,
reference is made to the copy of that contract or other document filed as an
exhibit to the registration statement, each statement being qualified in all
respects by that reference.
We
are
not required to deliver annual reports to stockholders, and we do not intend
to
voluntarily send annual reports with audited financial statements to
stockholders. However, on completion of this offering, we will become subject
to
the informational and periodic reporting requirements of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), and, in accordance with the
requirements of the Exchange Act, will file periodic reports, proxy statements,
and other information with the SEC. These periodic reports, proxy statements,
and other information will be available for inspection and copying at the
regional offices, public reference facilities and Web site of the SEC referred
to above. We have not filed any reports or statements with the SEC prior to
filing this registration statement and prospectus.
USE
OF PROCEEDS
A
substantial portion of the net proceeds of this Offering will be used for the
marketing and production of the Company’s product, working capital and other
general corporate purposes. Accordingly, management will have broad discretion
as to the specific application of a significant portion of the net
proceeds.
The
following table sets forth management’s estimate of the allocation of net
proceeds expected to be received from the sale of 1,000,000 Units included
in
this offering (not providing for the exercise of any warrants underlying the
Units). Actual expenditures may vary from these estimates. Until the proceeds
are used, we will invest the net proceeds in investment-grade, short-term,
interest bearing securities.
|
|
Assumed
|
|
%
|
|
Assumed
|
|
%
|
|
Assumed
|
|
%
|
|
Assumed
|
|
%
|
|
|
|
25%Units
|
|
|
|
50%
Units
|
|
|
|
75%
Units
|
|
|
|
100%
Units
|
|
|
|
|
|
sold
|
|
|
|
sold
|
|
|
|
sold
|
|
|
|
sold
|
|
|
|
Total
Proceeds
|
|
$
|
500,000
|
|
|
|
|
$
|
1,000,000
|
|
|
|
|
$
|
1,500,000
|
|
|
|
|
$
|
2,000,000
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated
offering expenses and filing fees
|
|
$
|
100,000
|
|
|
20
|
%
|
$
|
150,000
|
|
|
15
|
%
|
$
|
200,000
|
|
|
13
|
%
|
$
|
250,000
|
|
|
13
|
%
|
Net
Proceeds
|
|
$
|
400,000
|
|
|
|
|
$
|
850,000
|
|
|
|
|
$
|
1,300,000
|
|
|
|
|
$
|
1,750,000
|
|
|
|
|
Use
of Net Proceeds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General
and Administrative
|
|
$
|
100,000
|
|
|
25
|
%
|
$
|
125,000
|
|
|
15
|
%
|
$
|
150,000
|
|
|
12
|
%
|
$
|
200,000
|
|
|
11
|
%
|
Research
and Development
|
|
$
|
100,000
|
|
|
25
|
%
|
$
|
200,000
|
|
|
24
|
%
|
$
|
300,000
|
|
|
23
|
%
|
$
|
400,000
|
|
|
23
|
%
|
Working
capital
|
|
$
|
200,000
|
|
|
50
|
%
|
$
|
525,000
|
|
|
62
|
%
|
$
|
850,000
|
|
|
65
|
%
|
$
|
1,150,000
|
|
|
66
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
use of net proceeds
|
|
$
|
400,000
|
|
|
100
|
%
|
$
|
850,000
|
|
|
100
|
%
|
$
|
1,300,000
|
|
|
100
|
%
|
$
|
1,750,000
|
|
|
100
|
%
|
DETERMINATION
OF OFFERING PRICE
Our
offering price of $2.00 per Unit was arbitrarily determined by us based solely
upon the managements’ assessment of the value of the common stock. It is not
based upon an independent assessment of the value of our shares and should
not
be considered as such. The facts considered in determining the offering price
were our financial condition, prospects, our limited operating history and
the
general condition of the securities market. The offering price is not an
indication of and is not based upon the actual value of our Company. The
offering price bears no relationship to book value, assets or earnings of our
Company or any other recognized criteria of value. The offering price should
not
be regarded as an indicator of the future market price of the securities.
DIVIDENDS
We
do not
anticipate paying cash dividends on our common shares in the foreseeable future.
We may not have enough funds to legally pay dividends. Even if funds are legally
available to pay dividends, we may nevertheless decide in our sole discretion
not to pay dividends.
DILUTION
We
have a
negative net tangible book value of $340,128 and/or ($.07) per share as of
June
30, 2006. The dilution of our current shareholders resulting from the sale
of
the Units in our offering will vary depending on the total number of shares
underlying the Units that are sold.
|
|
Assumed
25%
Units
sold
|
|
Assumed
50%
Units
sold
|
|
Assumed
75%
Units
sold
|
|
Assumed
100%
Units
sold
|
|
Assumed
initial public offering price
|
|
$
|
2.00
|
|
$
|
2.00
|
|
$
|
2.00
|
|
$
|
2.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
tangible book value per share as of June 30, 2006
|
|
|
($0.07
|
)
|
|
($0.07
|
)
|
|
($0.07
|
)
|
|
($0.07
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
tangible book value per share after offering
|
|
$
|
0.01
|
|
$
|
0.09
|
|
$
|
0.17
|
|
$
|
0.23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dilution
per share to new investors
|
|
$
|
1.99
|
|
$
|
1.91
|
|
$
|
1.83
|
|
$
|
1.77
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase
per share to existing investors attributable to offering
|
|
|
($0.06
|
)
|
$
|
0.02
|
|
$
|
0.10
|
|
$
|
0.16
|
|
If
all
1,000,000 shares underling the Units offered hereunder were sold, there would
be
a total of 6,000,000 common shares outstanding (not providing for the exercise
of any warrants underlying the Units).. Adding the net offering proceeds after
expenses to the negative net tangible book value, our total net tangible book
value would be $1,409,872 and/or a weighted average of $0.23 per share.
Therefore, the shareholders who purchase in this offering will suffer an
immediate dilution in book value of their shares of approximately $1.77 and
our
present shareholders will receive and immediate book value increase of $0.16
per
share.
COMPARATIVE
DATA
The
following chart illustrates our pro forma proportionate ownership, upon
completion of the offering, assuming the maximum number of units is sold, of
present stockholders and of investors in the offering, compared to the relative
amounts paid and contributed to our capital by present stockholders and by
investors in this offering, assuming no changes in net tangible book value
other
than those resulting from the offering.
If
maximum offering of 1,000,000 was sold
|
|
Shares
Owned
|
|
Approximate
Percentage
Total
Shares
Outstanding
|
|
Total
Consideration
|
|
Approximate
Percentage
Total
Consideration
|
|
Average
Price
/
Share
|
|
New
Investors
|
|
|
1,000,000
|
|
|
17
|
%
|
$
|
1,750,000
|
|
|
124
|
%
|
$
|
0.29
|
|
Existing
Shareholders
|
|
|
5,000,000
|
|
|
83
|
%
|
$
|
(340,128
|
)
|
|
(24
|
%)
|
|
($0.06
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
6,000,000
|
|
|
100
|
%
|
$
|
1,409,872
|
|
|
100
|
%
|
$
|
0.23
|
|
If
75% offering of 1,000,000 was sold
|
|
Shares
Owned
|
|
Approximate
Percentage
Total
Shares
Outstanding
|
|
Total
Consideration
|
|
Approximate
Percentage
Total
Consideration
|
|
Average
Price
/
Share
|
|
New
Investors
|
|
|
750,000
|
|
|
13
|
%
|
$
|
1,300,000
|
|
|
135
|
%
|
$
|
0.23
|
|
Existing
Shareholders
|
|
|
5,000,000
|
|
|
87
|
%
|
$
|
(340,128
|
)
|
|
(35
|
%)
|
|
($
0.06
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
5,750,000
|
|
|
100
|
%
|
$
|
959,872
|
|
|
100
|
%
|
$
|
0.17
|
|
If
50% offering of 1,000,000was sold
|
|
Shares
Owned
|
|
Approximate
Percentage
Total
Shares
Outstanding
|
|
Total
Consideration
|
|
Approximate
Percentage
Total
Consideration
|
|
Average
Price
/
Share
|
|
New
Investors
|
|
|
500,000
|
|
|
9
|
%
|
$
|
850,000
|
|
|
167
|
%
|
$
|
0.15
|
|
Existing
Shareholders
|
|
|
5,000,000
|
|
|
91
|
%
|
$
|
(340,128
|
)
|
|
(67
|
%)
|
|
(
$
0.06
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
5,500,000
|
|
|
100
|
%
|
$
|
509.872
|
|
|
100
|
%
|
$
|
0.09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
If
25% offering of 1,000,000 was sold
|
|
Shares
Owned
|
|
Approximate
Percentage
Total
Shares
Outstanding
|
|
Total
Consideration
|
|
Approximate
Percentage
Total
Consideration
|
|
Average
Price
/
Share
|
|
New
Investors
|
|
|
250,000
|
|
|
5
|
%
|
$
|
400,000
|
|
|
668
|
%
|
$
|
0.08
|
|
Existing
Shareholders
|
|
|
5,000,000
|
|
|
95
|
%
|
$
|
(340,128
|
)
|
|
(568
|
%)
|
|
($
0.06
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
5,250,000
|
|
|
100
|
%
|
$
|
59,872
|
|
|
100
|
%
|
$
|
0.01
|
|
PLAN
OF DISTRIBUTION
Currently
we plan to have our officers sell the common shares on a self-underwritten
basis. They will receive no discounts or commissions. Our officers will deliver
prospectuses to these individuals and to others who they believe might have
interest in purchasing all or a part of this offering.
We
also
may retain licensed broker/dealers to assist us in the offer and sell of the
shares of our common stock, if we deem such to be in our best interest. At
this
time we do not have any commitments, agreements or understandings with any
broker/dealers. The maximum underwriting discounts and commissions we are
willing to pay to engage broker/dealers is 10%. In the event we retain any
broker/dealers to assist in the offer and sell of shares of our common stock
we
will update this prospectus accordingly.
In
order
to buy shares of our common stock you must complete and execute the subscription
agreement and return it to us at
777
S. Highway 101, Suite 215, Solana Beach, CA 92075
.
Payment
of the purchase price must be made by check payable to the order of “Bond.” The
check may be delivered directly to
777
S. Highway 101, Suite 215, Solana Beach, CA 92075
telephone
858-847-9000, or to us at the abovementioned address.
We
have
the right to accept or reject subscriptions in whole or in part, for any reason
or for no reason. All monies from rejected subscriptions will be returned
immediately to the subscriber, without interest or deductions. Subscriptions
for
securities will be accepted or rejected within 48 hours after we receive them.
Our
officers will not register as a broker/dealer under Section 15 of the
Securities Exchange Act of 1934 (the “Exchange Act”) in reliance upon Rule
3a4-1. Rule 3a4-1 sets forth those conditions under which a person associated
with an issuer may participate in the offering of the issuer’s securities and
not be deemed to be a broker/dealer. The conditions are that:
1.
The
person is not statutorily disqualified, as that term is defined in
Section 3(a)(39) of the Act, at the time of his participation; and,
2.
The
person is not at the time of their participation, an associated person of a
broker/dealer; and,
3.
The
person meets the conditions of Paragraph (a)(4)(ii) of Rule 3a4-1 of the
Exchange Act, in that he (A) primarily performs, or is intended primarily
to perform at the end of the offering, substantial duties for or on behalf
of
the issuer otherwise than in connection with transactions in securities; and
(B) is not a broker or dealer, or an associated person of a broker or
dealer, within the preceding twelve (12) months; and (C) do not
participate in selling and offering of securities for any issuer more than
once
every twelve (12) months other than in reliance on Paragraphs (a)(4)(i) or
(a)(4)(iii).
Our
officers and directors are not statutorily disqualified, are not being
compensated, and are not associated with a broker/dealer. They are, and will
continue to be, our officers and directors at the end of the offering, and
have
not been, during the last twelve months, and are currently not, broker/dealers
or associated with broker/dealers. They have not, nor will not, participate
in
the sale of securities of any issuer more than once every twelve months. After
our registration statement is declared effective by the SEC we intend to
advertise, through tombstones, and hold investment meetings in various states
where the offering will be registered. We will not utilize the Internet to
advertise our offering. We will also distribute the prospectus to potential
investors at meetings and to our friends and relatives who are interested in
us
and a possible investment in the offering.
We
intend
to sell our shares in the United States of America, and/or offshore.
PENNY
STOCK RULES / SECTION 15(G) OF THE EXCHANGE ACT
Our
shares are covered by Section 15(g) of the Securities Exchange Act of 1934,
as amended, and Rules 15g-1 through 15g-6 promulgated thereunder. They impose
additional sales practice requirements on broker/dealers who sell our securities
to persons other than established customers and accredited investors who are
generally institutions with assets in excess of $5,000,000, or individuals
with
net worth in excess of $1,000,000 or annual income exceeding $200,000, or
$300,000 jointly with their spouses.
Rule
15g-1 exempts a number of specific transactions from the scope of the penny
stock rules. Rule 15g-2 declares unlawful broker/dealer transactions in penny
stocks unless the broker/dealer has first provided to the customer a
standardized disclosure document.
Rule
15g-3 provides that it is unlawful for a broker/dealer to engage in a penny
stock transaction unless the broker/dealer first discloses, and subsequently
confirms to the customer, current quotation prices or similar market information
concerning the penny stock in question.
Rule
15g-4 prohibits broker/dealers from completing penny stock transactions for
a
customer unless the broker/dealer first discloses to the customer the amount
of
compensation or other remuneration received as a result of the penny stock
transaction.
Rule
15g-5 requires that a broker/dealer executing a penny stock transaction, other
than one exempt under Rule 15g-1, disclose to its customer, at the time of,
or
prior to, the transaction, information about the sales persons compensation.
Rule
15g-6 requires broker/dealers selling penny stocks to provide their customers
with monthly account statements.
Rule
15g-9 requires broker/dealers to approve the transaction for the customer’s
account; obtain a written agreement from the customer setting forth the identity
and quantity of the stock being purchased; obtain from the customer information
regarding his investment experience; make a determination that the investment
is
suitable for the investor; deliver to the customer a written statement for
the
basis for the suitability determination; notify the customer of his rights
and
remedies in cases of fraud in penny stock transactions; and, contact the NASD’s
toll free telephone number and the central number of the North American
Administrators Association for information on the disciplinary history of
broker/dealers and their associated persons.
The
application of the penny stock rules may affect your ability to resell your
shares due to broker-dealer reluctance to undertake the above described
regulatory burdens.
LEGAL
PROCEEDINGS
We
are
not a party to any pending material legal proceedings and are not aware of
any
threatened or contemplated proceeding by any governmental authority against
us.
DIRECTORS,
EXECUTIVE OFFICERS AND CONTROL PERSONS
Our
directors, executive officers and control persons their respective ages
as
of September 25, 2006 are as follows:
|
|
|
|
|
Name
|
|
Age
|
|
Position
|
Scott
D. Landow
|
|
51
|
|
Sole
Director: Chief Executive Officer; Chief Financial Officer; Senior
Managing Director of New Business Development
|
Robert
A. Kay, Ph.D., R.D.
|
|
54
|
|
Senior
Managing Director of Science and Technology
|
Paul
J. Dallura
|
|
52
|
|
Director
of Operations
|
Thomas
Kucharski Ph. M.S.
|
|
56
|
|
Director
of Manufacturing and Production
|
Business
Experience
All
of
our directors serve until their successors are elected and qualified by our
shareholders, or until their earlier death, retirement, resignation or removal.
The following is a brief description of the business experience of our executive
officers, director and significant employees:
Bond
has
assembled a team with extensive experience in new business development as well
as in the Nutraceutical and Dietary Supplement business
:
Scott
D. Landow
is
our
sole director, CEO, CFO, and Senior Managing Director of New Business
Development since May, 2005. From December 2005 through May 2005 Mr. Landow
was
President, CEO and a member of the board of directors of Bridgetech Holdings
International a publicly traded company
leveraging
significant relationships in China & the U.S. to capitalize on proprietary
opportunities in high growth segments of the healthcare industry.
From
August 2000 through February 2005, Mr. Landow was President of Parentech Inc.,
an emerging medical device company for newborns and infants.
Robert
A. Kay, Ph.D., R.D.
is
Senior Managing Director of Science and Technology for Bond Laboratories, Inc.
Prior to becoming involved with Bond, Dr. Kay was Vice President of Science
and
Technology for Natural Alternatives International, a publicly traded
International contract manufacturer of dietary supplements
company,
where he was responsible for and oversaw Product Development, Quality Control,
Quality Assurance, and Regulatory Affairs. He was Vice President of Product
Development at Anabolic Laboratories, Inc.; Chief Science Officer and Senior
Vice President of Technical Affairs at Leiner Health Products; Vice President
of
Research and Development for Metagenics; Chief Operations Officer and Senior
Vice President of Research and Development for Earthrise Company.
Thomas
W. Kucharski, R. Ph., M.S
.
is
Director of Manufacturing and Production. Prior to becoming involved with Bond,
Mr Kucharski was the Director of Quality Control for Natural Alternatives
International, where he was the Manager of the Analytical Laboratory (6
chemists) and the Manager of the Microbiological laboratory. He was Vice
President of Research and Development for Leiner Health Products where he
developed 127 new products that met DSHEA requirements; Bayer Consumer Care
where he managed the formulation, development, optimization of new OTC/VMS
products
Paul
J. Dallura
,
is
Director of Operations for Bond Laboratories, Inc. Prior to becoming involved
with Bond, Mr. Dallura has had several years of National and International
experience in all aspects of operations including Facility, Manufacturing
production and Human Resources. Mr Dallura spent over six years at Anabolic
Laboratories, a Nutritional Supplements contract manufacturer where he oversaw
the day to day activities of the entire production facility.
Involvement
in Certain Legal Proceedings
To
the
best of our knowledge, during the past five years, none of the following
occurred with respect to a present or former director or executive officer
of
the Company: (1) any bankruptcy petition filed by or against any business
of which such person was a general partner or executive officer either at the
time of the bankruptcy or within two years prior to that time; (2) any
conviction in a criminal proceeding or being subject to a pending criminal
proceeding (excluding traffic violations and other minor offenses);
(3) being subject to any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of any competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise limiting
his involvement in any type of business, securities or banking activities;
and
(4) being found by a court of competent jurisdiction (in a civil action),
the Securities and Exchange Commission or the commodities futures trading
commission to have violated a Federal or state securities or commodities law,
and the judgment has not been reversed, suspended or vacated.
Board
Committees and Independence
All
of
the directors serve until the next annual meeting of common shareholders and
until their successors are elected and qualified by our common shareholders,
or
until their earlier death, retirement, resignation or removal. Our Bylaws set
the authorized number of directors at not less than one nor more than nine,
with
the actual number fixed by our board of directors. Our Bylaws authorized the
Board of Directors to designate from among its members one or more committees
and alternate members thereof, as they deem desirable, each consisting of one
or
more of the directors, with such powers and authority (to the extent permitted
by law and these Bylaws) as may be provided in such resolution.
The
entire Board of Directors will perform the function of the Audit Committee
until
we appoint directors to serve on the Audit Committee.
The
entire board performs the functions of the Compensation Committee until we
appoint directors to serve on the Compensation Committee.
EXECUTIVE
COMPENSATION
Summary
Compensation Table
The
following table sets forth for the year ended December 31, 2005 compensation
awarded to, paid to, or earned by,
Mr.
Scott
Landow,
our
sole
Director and Chief Executive Officer
,
and
our
three
other most highly compensated executive officers whose total compensation during
the last fiscal year exceeded $100,000, if any.
|
|
|
|
|
|
Long
Term Compensation
|
|
|
|
|
Annual
Compensation
|
|
|
Awards
|
|
|
Payouts
|
|
Name
and Principal Position
|
|
|
Year
|
|
|
Salary
|
|
|
Bonus
|
|
|
Other
Annual
Compensation
|
|
|
Restricted
Stock
Award
(s
)
|
|
|
Securities
Underlying
Options/SARs
(#
)
|
|
|
LTIP
Payouts
|
|
|
All
Other
Compen-
sation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scott
Landow
CEO,
CFO and sole Director
|
|
|
2006
|
|
$
|
120,000
|
|
|
|
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2005
|
|
$
|
80,000
|
|
|
|
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Employment
Agreements
Aggregated
Option Exercises and Fiscal Year-End Option Value Table
Name
|
|
Shares
Acquired on
Exercise
|
|
Value
Realized
|
|
Number of Securities
Underlying
Unexercised
Options/SAR at
December 31, 2005
Exercisable/
Unexercisable
|
|
Value
of
Unexercised
In-the-money
Options/SAR at
December 31, 2005
Exercisable/
Unexercisable
|
|
Scott
Landow,
CEO,
CFO and sole Director
|
|
|
0
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
0
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
0
|
|
$
|
0
|
|
|
|
|
|
|
|
(1)
Assumes
a
market price of $2.00.
Compensation
of BOD Members
We
currently have one director. Our current compensation policy for directors
is to compensate them through options to purchase common stock as consideration
for their joining our board and/or providing continued services as a director.
We do not currently provide our directors with cash compensation, although
we do
reimburse their expenses, with exception for a chairman of the board. No
additional amounts are payable to the Company’s directors for committee
participation or special assignments. There are no other arrangements pursuant
to which any directors was compensated during the Company’s last completed
fiscal year for any service provided.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth certain information regarding beneficial ownership
of
the common stock as of December 31, 2005 and September 25, 2006, by
(i) each person who is known by the Company to own beneficially more than
5% of the any classes of outstanding Stock, (ii) each director of the
Company, (iii) each of the Chief Executive Officers and the two
(2) most highly compensated executive officers who earned in excess of
$100,000 for all services in all capacities (collectively, the “Named Executive
Officers”) and (iv) all directors and executive officers of the Company as
a group.
The
number and percentage of shares beneficially owned is determined in accordance
with Rule 13d-3 and 13d-5 of the Exchange Act, and the information is not
necessarily indicative of beneficial ownership for any other purpose and
is
based on 5,000,000 shares beneficially owned as of September 25, 2006. We
believe that each individual or entity named has sole investment and voting
power with respect to the securities indicated as beneficially owned by them,
subject to community property laws, where applicable, except where otherwise
noted. Unless otherwise stated, the address of each person; 777 S. Highway
101,
Suite 215, Solana Beach, CA 92075.
Name
of Beneficial Owner
|
|
Number of Shares
of Common Stock
(1)
|
|
Percent of
Class
(1)
|
|
Scott
Landow (1)
|
|
|
1,250,000
|
|
|
25
|
%
|
Small
World Traders, Inc. (1)
|
|
|
1,250,000
|
|
|
25
|
%
|
Landow
Revocable Trust 2006 (1)
|
|
|
1,250,000
|
|
|
25
|
%
|
(1)
Scott
Landow, through Landow Revocable Trust 2006 which is controlled by Scott Landow
, controls Small World Traders, Inc.
Changes
in Control
We
are
not aware of any arrangements that may result in a change in control of the
Company.
DESCRIPTION
OF SECURITIES
General
Our
authorized capital stock consists of 75,000,000 shares of common stock, par
value $ .01, and 10,000,000 shares of preferred stock.
Common
Stock
The
shares of our common stock presently outstanding, and any shares of our common
stock issues upon exercise of stock options and/or warrants, will be fully
paid
and non-assessable. Each holder of common stock is entitled to one vote for
each
share owned on all matters voted upon by shareholders, and a majority vote
is
required for all actions to be taken by shareholders. In the event we liquidate,
dissolve or wind-up our operations, the holders of the common stock are entitled
to share equally and ratably in our assets, if any, remaining after the payment
of all our debts and liabilities and the liquidation preference of any shares
of
preferred stock that may then be outstanding. The common stock has no preemptive
rights, no cumulative voting rights, and no redemption, sinking fund, or
conversion provisions. Since the holders of common stock do not have cumulative
voting rights, holders of more than 50% of the outstanding shares can elect
all
of our Directors, and the holders of the remaining shares by themselves cannot
elect any Directors. Holders of common stock are entitled to receive dividends,
if and when declared by the Board of Directors, out of funds legally available
for such purpose, subject to the dividend and liquidation rights of any
preferred stock that may then be outstanding.
Preferred
Stock
We
are
authorized to issue 10,000,000 shares of preferred stock, $.01 par value, of
which 5,000,000 are issued and outstanding as of August , 2006.
Dividend
Policy
We
have
never declared or paid any cash dividends on our common stock. We currently
intend to retain future earnings, if any, to finance the expansion of our
business. As a result, we do not anticipate paying any cash dividends in the
foreseeable future.
Options
and Warrants:
As
of
September 7, 2006 there were no options or warrants to acquire shares of the
Company’s common stock outstanding. The Company will be issuing warrants in the
offering.
Convertible
Securities
Between
September 2005 and August, 2006, the Company issued $290,000 in two year secured
convertible notes, convertible into shares of the Company’s common stock at
$1.00 per share.
Amendment
of our Bylaws
Our
bylaws may be adopted, amended or repealed by the affirmative vote of a majority
of our outstanding shares. Subject to applicable law, our bylaws also may be
adopted, amended or repealed by our board of directors.
DISCLOSURE
OF COMMISSION POSITION OF INDEMNIFICATION FOR SECURITIES ACT LIABILITIES;
ANTI-TAKEOVER, LIMITED LIABILITY AND INDEMNIFICATION PROVISIONS
Certificate
of Incorporation and Bylaws.
Pursuant
to our amended certificate of incorporation, our board of directors may issue
additional shares of common or preferred stock. Any additional issuance of
common stock could have the effect of impeding or discouraging the acquisition
of control of us by means of a merger, tender offer, proxy contest or otherwise,
including a transaction in which our stockholders would receive a premium over
the market price for their shares, and thereby protects the continuity of our
management. Specifically, if in the due exercise of its fiduciary obligations,
the board of directors were to determine that a takeover proposal was not in
our
best interest, shares could be issued by the board of directors without
stockholder approval in one or more transactions that might prevent or render
more difficult or costly the completion of the takeover by:
·
diluting
the voting or other rights of the proposed acquirer or insurgent stockholder
group;
·
putting
a
substantial voting block in institutional or other hands that might undertake
to
support the incumbent board of directors; or
·
effecting
an acquisition that might complicate or preclude the takeover.
Nevada
Anti-Takeover Law
.
We are
subject to the provisions of the Nevada General Corporation Law concerning
corporate takeovers.
Limited
Liability and Indemnification.
Our
certificate of incorporation eliminates the personal liability of our directors
for monetary damages arising from a breach of their fiduciary duty as directors
to the fullest extent permitted by Delaware law. This limitation does not affect
the availability of equitable remedies, such as injunctive relief or rescission.
Our certificate of incorporation requires us to indemnify our directors and
officers to the fullest extent permitted by Delaware law, including in
circumstances in which indemnification is otherwise discretionary under Delaware
law.
Under
Nevada law, we may indemnify our directors or officers or other persons who
were, are or are threatened to be made a named defendant or respondent in a
proceeding because the person is or was our director, officer, employee or
agent, if we determine that the person:
|
·
|
conducted
himself or herself in good faith;
|
|
·
|
reasonably
believed, in the case of conduct in his or her official capacity
as our
director or officer, that his or her conduct was in our best interests,
and, in all other cases, that his or her conduct was at least not
opposed
to our best interests; and
|
|
·
|
in
the case of any criminal proceeding, had no reasonable cause to believe
that his or her conduct was unlawful.
|
These
persons may be indemnified against expenses, including attorney fees, judgments,
fines, including excise taxes, and amounts paid in settlement, actually and
reasonably incurred, by the person in connection with the proceeding. If the
person is found liable to the corporation, no indemnification shall be made
unless the court in which the action was brought determines that the person
is
fairly and reasonably entitled to indemnity in an amount that the court will
establish.
Insofar
as indemnification for liabilities arising under the Securities Act of 1933
may
be permitted to our directors, officers, and controlling persons pursuant to
the
foregoing provisions, or otherwise, we have been advised that in the opinion
of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable.
In
the
event that a claim for indemnification against such liabilities is asserted
by
one of our directors, officers, or controlling persons in connection with the
securities being registered, we will, unless in the opinion of our legal counsel
the matter has been settled by controlling precedent, submit the question of
whether such indemnification is against public policy to court of appropriate
jurisdiction. We will then be governed by the court’s decision.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Certain
Related Party Transactions Within The Past Two Years.
The
following are certain transactions or proposed transactions during the last
two
years to which we were a party, or proposed to be a party, in which certain
persons had a direct or indirect material interest.
Loan
and Advances from Officers & Stockholders
During
the period July 26, 2005 (inception) though June 30, 2006, certain officers
and
stockholders advanced to the Company.
Name
|
|
Position
|
|
Cash
Advances
|
|
Salary
Deferred
|
|
Amount
Outstanding
at
June
30,
2006
|
|
Small
World Traders, Inc.
|
|
|
Scott
Landow, through Landow Revocable Trust 2006 which is controlled by
Scott
Landow, controls Small World Traders, Inc.
|
|
$
|
99,247.92
|
|
|
|
|
$
|
99,247.92
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scott
Landow
|
|
|
Director,
CEO, CFO
|
|
|
|
|
$
|
120,000
|
|
$
|
120,000
|
|
ORGANIZATION
WITHIN LAST FIVE YEARS
We
were
incorporated in the State of Nevada on July 26, 2005.
DESCRIPTION
OF BUSINESS
Bond
Laboratories is building a turn-key Nutraceutical Dietary Supplement business
catering to all five of the major distribution channels focusing on the three
major categories of the industry; Energy, Pain Relief and Weight loss, utilizing
state of the art, alternative delivery methods vs. antiquated capsules and
pills.
The
opportunity to create a successful, financially rewarding functional foods
company has never been better. Consumers of dietary supplements and functional
foods have an unquenchable hunger for innovative, effective products and the
market clearly indicates consumer willingness to spend money on value-added
products such as energy drinks, energy bars, and novel functional foods that
offer solutions to health problems. In fact, Datamonitor (DTM.L), London, U.K.,
has recently released a new report entitled “Evolution of Global Consumer
Trends,” identifying ‘Health’ and ‘Convenience’ as 2 of the top 10 global trends
influencing consumer buying behavior in Europe, North America, Latin American
and Asia-Pacific.
Health:
there is
a growing recognition that physical and mental wellbeing matter. Statistics
show
that an overwhelming majority of European and U.S. consumers feel that improving
their health is important. Even more significant is that 64% of Europeans and
U.S. consumers actually took "steps" to improve their health during 2003-04.
Datamonitor also identifies the crossover trend of health and convenience
(health on-the-go) as an under-targeted opportunity with high growth potential.
Convenience:
the
demand for easier, faster and disposable products. Convenience, time saving
products, and “quick fixes” are important to 82% of European and U.S. consumers.
Convenience is also impacting personal care consumption; 57% of European and
U.S. consumers report that they groom while on-the-move and 58% admit to
grooming at-work. Bond Laboratories is ideally positioned to lever the
opportunity of providing products to this broad consumer base.
Bond
will
initially be developing proprietary formulated products that address the three
largest mega-categories; Energy, Pain Relief and Weight-loss. Within these
mega-niches, Bond is focusing its product development, marketing, and sales
initiatives on unique marketing subgroups within the mega-categories. An example
of such an opportunity and the first focus of Bond Laboratories is the exploding
energy drink market. New concepts and strong marketing have driven the global
energy drinks market into the mainstream. Consumption leaped by 18 per cent
in
2004 to 2,410 million liters, according to the new 2005 Global Energy Drinks
report from specialist drinks consultancy Zenith International. And new
innovations, which have been a driving factor, continue to feature strongly
in
this segment.
The
concept of caffeine based 'body and mind stimulating' energy drinks originates
from Japan and Thailand. Although Asia Pacific remains the top region, with
a 58
per cent share of total volume in 2004, its lead is expected to decline as
other
areas develop. North America for example has just overtaken West Europe to
hold
the next largest share at 15 per cent. From small beginnings, its average growth
since 1999 has been an impressive 68 per cent a year. The United States is
expected to become the largest national market by 2009.
The
Company has a focused vision, talented executive leadership, excellent product
innovation capabilities, significant manufacturing experience, and the potential
to attain success within the functional food marketplace. The executive team
is
comprised of experienced businessmen who have been instrumental in creating
products that have been profitably marketed in the food, drug and mass sectors
(FDM), multi level marketing sector (MLM,) club/warehouse store sector,
direct-to-consume sector (DTC,) contract manufacturing sector, and Rx/OTC
marketplace sectors. These products were successful in achieving achieved
substantially higher margins than most other consumer products categories and
we
believe that this team will be bring the same success and results to Bond
Laboratories’ products.
PRODUCTS
Phase
I
Energy
Products
Effervescent
Energy Drink
This
product contains both ingredients that are easily recognized by the consumer
and
novel ingredients that will be the proprietary property of Bond. The product
is
packaged in vials as a powder to be mixed with cold water. Ingredients include:
caffeine; ginseng; Guarana, taurine (an amino acid-like nutrient); B-vitamins;
potassium; a proprietary blend of special herbs; and natural and artificial
flavors. One convenient vial has a superior nutritional profile to the
ever-popular Red Bull and Monster liquid energy drinks. The advantage of having
the product in the form of an effervescent powder is that it can be used
anywhere that water is sold or dispensed. The marketplace deployment of
ready-to-drink energy products is not all-prevailing. The marketplace deployment
of cold, bottled water is ubiquitous. Thus, no need to carry around a bulky
can
of an energy drink. All that is needed is access to cold water, either bottled
or dispensed from a water cooler. The effervescent powder delivery form, is
portable, convenient, portrays a high-quality image, tastes great, and is
ready-to-use anywhere.
Diet
Effervescent Energy Drink
The
original ‘fusion’ contains approximately 100 calories, 10-30 below a can of Red
Bull, RockStar of Coca Cola. The next natural extension of the brand will be
diet versions of the original ‘fusion’ and the ‘seize the day’ product. This
should expand potential sales by approximately 35%, equivalent to the percentage
of consumers that consume diet drinks on a regular basis.
Phase
II
Other
Products and Opportunities - Expand Existing formulations to other ‘Niche’
markets.
The
other
two highest volume products in the nutraceutical supplement business today
are
Pain Management/Prevention and Weight Loss. With this in mind, Bond has already
begun formulation plans for an innovative product line that will distinguish
itself based on science and results.
This
logical progression of product development efforts allows Bond to capture quick
revenue within a specific market niche and then expand its marketing reach
to
other niches. Minor product modifications will occur as Bond migrates and fine
tunes its major focus from one segment to the next.
Three
Advanced Nutritional Products for Seniors and
Soon-to-be-Seniors
The
products that will be marketed to these consumers will be modified versions
of
the products that were marketed to college students. Instead of providing a
substantial energy “jolt,” the products will provide nutrients and special
botanical ingredients that improve energy, mental focus and function, stress
relief and overall feelings of well-being.
1.
Effervescent Energy Drink
Liquid
nutritional products, such as effervescent drinks, are typically regarded as
superior in delivering nutrients to the body versus tablets or capsules. Even
tablets and capsules need to be in solution before the nutrients from them
can
be absorbed. Thus, having a convenient, use-anywhere, good tasting,
vitamin-mineral-energy effervescent drink powder is both logical and
market-sensitive. In addition, many seniors experience difficulty in swallowing
tablets and capsules, so an effervescent powder provides a convenient and
easy-to-use form. It delivers nutrients quickly and tastefully to a target
audience that can appreciate the appeal of a nutritious drink.
2.
Pain Relief
Specifically,
Migraine pain relief. Over the past several years, the Director of Science
and
Formulation for the Company, worked on a project with an herbal formulation
that
showed strong results in reducing in chronic migraine symptoms. For issues
that
had nothing to do with the product, it was never brought to market and
eventually shelved. Bond has secured the rights for the first year of crop
production of this herb.
3.
Weight-Loss
As
people
age, calories naturally start to be redirected to become fat versus being used
to provide immediate energy. The nutritional needs of older consumers are far
different than those of younger consumers. The older consumers need more
nutrient-dense foods and dietary supplements that naturally enhance metabolism.
Bond will be offering a safe weight-loss dietary supplement powder product
that
enhances the metabolism and assists in either losing weight or maintaining
a
specific weight. A core set of ingredients in the products will be derived
from
coffee. Two specific coffee extracts will be used: one is from the green coffee
bean, and the other is from the coffee cherry. The green coffee bean extract
has
been shown in some preliminary research to promote weight-loss. The coffee
cherry extract has been shown to contain exceptionally high levels of
antioxidants. It is superior in its antioxidant capacity when compared to both
blueberries and grape seed, two of the botanical ingredients strongly associated
with antioxidant function. Thus, our key ingredient will be a proprietary blend
of both the green coffee bean and the coffee cherry.
Phase
III
Beyond
Energy, Pain Relief and Weight loss
Safe
Energy Products for Mothers-to-Be and New Mothers
These
two
consumer groups have been woefully underserved by the pharmaceutical and
nutraceutical industries in regard to product offerings. Pregnant women and
new
mothers have extremely unique dietary supplement needs, especially when it
comes
to helping to support feelings of energy and well-being, weight-loss after
the
baby is born, and overall mood enhancement without the use of drugs. Bond has
identified and discovered some unique nutrients that can be provided to the
consumers within these segments. These include choline, essential fatty acids,
specific amino acids, and other unique conditionally essential
nutrients.
The
dietary supplement products will be formulated with the intent of ensuring
that
the pregnant woman and mother-to-be receive all the supplementary nutrients
she
needs to support the exceptional health of her baby. After the delivery of
the
baby, Bond will be developing a marketing program loosely designed after the
Gatorade program, “is it in you?” The core message in the Bond marketing program
will be to educate and motivate the woman to consume the correct dietary
supplements that will be transferred to the baby during nursing. The milk of
nursing mothers is the only nutrition the baby will receive for many months.
The
nutritional quality of the breast milk is entirely dependent upon the mother’s
bodily nutrient stores and what she consumes on a daily basis. The breast milk
content of unique and essential fatty acids, amino acids, minerals, and other
critical elements can be safely enhanced by providing superior nutrition with
dietary supplements. For example, it has been researched and cited that the
infant who receives adequate fatty acids such as docosahexaenoic acid (DHA)
found in fish has a higher IQ when older, as much as 8 IQ points. If one looks
at the nutrition facts panel on infant formulas you will see that there are
several nutrients that have never been put into a nursing mother’s dietary
regimen, e.g., taurine, choline, DHA/ARA (arachidonic acid - another fatty
acid
needed for health), etc. It is Bond’s intent to be the category leader in the
prenatal and postnatal dietary supplement marketplace by providing these unique
and rarely used nutrients. These nutrients are regarded by experts as essential
for adequate infant growth, health, and mental function. It is also believed
that the drain on the mother’s body for these nutrients leads to fatigue - both
physical and mental. By supplementing the mother with these unique nutrients
her
energy levels will be improved and sustained and thus her feeling of well-being.
Weight-loss
and Mood Enhancement Products after the Baby Arrives
After
the
baby arrives, most mothers find that they have gained both the weight of the
baby and a considerable amount of other weight. If they are nursing, they will
usually wait until after they have stopped nursing before they start a
weight-loss program. In addition to losing weight, there are a significant
number of women who experience postpartum depression (a form of depression
that
occurs after the baby has been delivered.) There are
currently
no
nutritional supplements that have been designed to address this form of
depression.
Again,
Bond Laboratories will build upon its solid reputation for marketing safe,
effective products and offer weight-loss products that increase feelings of
energy and assist the body in losing weight. The core ingredient in the weight
loss products will be Caffenol Pure
TM
,
and
Super Citrimax Clinical Strength. The weight loss tablet product will be very
similar to the product that has been already introduced to seniors and the
weight loss snack will be very similar to the Snack Bites for Health
TM
.
The
unique difference for the weight loss tablets is that they will also contain
special nutrients that improve mood and help fight depression. These nutrients
include specific amino acids, specific vitamins and minerals, DHA, and what
are
considered as conditionally essential nutrients such as taurine and choline.
The
unique modifications for the snack bites will include special mood-enhancing
derivatives of chocolate.
BUSINESS
STRATEGY
The
Opportunity and Vision for Bond Laboratories:
Establish
a company with the ability to maximize sales at all levels of the product life
cycle.
·
|
Build
an R&D facility based on the experience of Management to facilitate
internal ideas and ‘orphan’ product development.
|
·
|
Control
manufacturing by acquiring limited equipment that is specific in
nature to
products that have already proved market
capabilities.
|
·
|
Build
a Distribution Network by partnering in advance with centers of influence
in each of the key segments of Nutritional Supplement
marketing.
|
Focusing
Upon Successful Products - and Dosage Forms
Bond
is
focusing upon developing and deployment of niche products in dosage forms that
are pleasing (branded and contract manufacturing); niche products that have
very
unique selling propositions (USPs) and intellectual property (branding, patents,
trade secrets, and early-in-life cycle positioning) power. The Company strategy
is to:
1.
Manufacture unique dosage forms, specifically powders in convenient single
serving dosage forms, e.g., effervescent drink powders, children’s nutraceutical
drink powders, Rx and OTC drug products, and related products. These will be
in
the forms of both branded products and in private label (contract manufacturing)
products.
2.
Create
and deploy in the marketplace(s) unique and innovative products that initiate
immediate repeat purchases from the consumer because they are highly effective
at producing recognizable effects upon health, well-being, energy, mental focus,
athletic performance, and self-image in a relatively short period of time.
These
will be in branded formats, private label formats, and contract manufacturing
formats. The Company will manage the life cycle of its unique intellectual
property products (and processes) from new-to-market through the mature state.
(This latter stage of product life cycle is when products become more generic
and less costly.)
3.
Acquire orphan or widow products or brands to enhance the Company portfolio.
This third part of the Company’s business strategy is very similar to that of
Prestige Brands (http://www.prestigebrands.com/aboutus-his.htm,) except for
the
fact that the Company will focus upon the nutraceutical marketplace. These
are
products that have somehow been under-capitalized or poorly managed. They
require the skill of industry experts to administer the “paddles” to resuscitate
the product or company and improve net profits through innovation not just
through slicing and dicing the business structure.
The
typical barriers to entry for start up products like the constraints of
manufacturing and distribution still exist, but acceptance to new and innovative
formulations is creating a more level playing field.
Bond
Laboratories is positioned to enter the forefront of the Nutraceutical
Supplements business by identify and nurturing new product development and
focusing on alternative delivery platforms for existing formulations vs. the
traditional pill/capsule methods, which have proved to be overwhelming and
often
difficult for the consuming public to digest. With a management team that has
extensive relationships and experience in all aspects of the Nutritional
Supplement business including; research and development; contract manufacturing;
distribution; and marketing on an international level, the Company believes
it
can create a environment that nurtures unique ideas to profitability and assists
them in overcoming the typical constraints that make barriers to entry so
difficult.
The
Nutritional Supplements Industry is dominated by numerous small inventors and
entrepreneurs with innovative product ideas, (orphan products), but little
or no
market experience; and a few major Distribution companies:
·
|
A
doctor here, a dietician there, a pharmacist or a nurse watch the
activities of their patients and envision a product that could make
life
easier, less stressful and more enjoyable. Some of these people take
the
steps to formulate a sample or proto-type of their vision. With enough
positive feedback, a few will try to bring the new formulation to
the
public. But, the barriers to market entry keep numerous small start-up
companies with good product ideas from succeeding. They lack a large
enough distribution channel to justify production levels necessary
to
achieve profitability.
|
·
|
On
the other end of the spectrum are Large Distribution Companies,
predominantly comprised of Wholesale companies supplying mass retailers
with branded products or private label programs, and Direct to Consumer
MLM’s, (Multi Level Marketers).
|
The
lifecycle of a typical Nutritional Supplement Product begins with the
entrepreneur. Should they be lucky enough to succeed through the difficult
start
up stages, bring their product to market and achieve sales volume high enough
to
reach cost effect production, they can expect to capture between 5% and 10%
of
the potential market. The balance will go to Large Distributors who will have
slight variations of the original product developed for them and proceed to
capture the lion’s share of the market through Private Label Programs for Major
Retailers, Direct to Consumer and Multi-Level Marketing companies.
A.
P
RODUCT
D
EVELOPMENT
S
TAGES
Phase
One: Branded and Contract Product Manufacturing - Individual Serving
Powders
The
Company will acquire manufacturing space and the equipment necessary to
manufacture single-serving powder products. These include: effervescent powder
drink mixes (energy and electrolyte/vitamin,) children’s multivitamin-mineral
“pixie sticks,” children’s and tweens multivitamin-mineral drink mixes, and
related products. The products will be both branded and contract manufactured.
The Company has over thirty products in various stages of development at this
time. This phase will allow the Company to grow by offering a unique packaging
format to qualified companies as well as for the Company’s branded
products.
Phase
Two: Protected Intellectual Property Products
At
the
current time, the executive team is developing weight loss and diet products
and
condition-specific products (migraine, visual impairment, cognitive dysfunction,
immune enhancement, and vanity-related products.) At this time, all of the
products the Company is researching are protected by either trade secret or
patent. This phase will allow the Company to grow by offering innovative
products either for sale directly to the consumer or through
licensing.
Phase
Three: Orphans and Widows
During
Phase Three, the Company will acquire products or companies that have either
been undercapitalized or poorly managed. This phase will allow the Company
to
grow by acquisition and offering the muscle to take the orphans and widows
to
greater levels of success.
THE
MARKET.
A.
NUTRACEUTICAL AND DIETARY SUPPLEMENTS INDUSTRY OVERVIEW
Due
to
the increasing prices of healthcare and rising longevity, consumers are
purchasing nutraceutical dietary supplements in record numbers for prevention
and health maintenance. At the same time, the dynamics of the industry itself
are changing. Historically, these products have used a pill or capsule delivery
method, which when increased in daily consumption, has proved to have a negative
effect of the stomach. Major firms in the industry are looking to develop an
alternative delivery platform for their products.
There
has
been a steady migration from the solid dosage forms, i.e., capsules, tablets,
and softgels, to more organoleptically (pleasant tasting and sensory gratifying)
dosage forms. Research has shown that there is a limit to the number of solid
dosage forms a person willingly consumes each day. The vast majority of
consumers will digest five or less solid dosage forms per day without much
hesitation. Compliance to dietary supplement regimens that dictate the
consumption of more than five per day is very weak. As people age, and are
required to consume solid dosage form medications, the number of dietary
supplements they consume will either remain at five or less, or even decrease.
Industry
experts refer to this as “pill fatigue”.
This
fatigue factor has resulted in a dramatic and significant shift in buying habits
by those people who wish to improve their health with dietary supplements.
There
is a limit to the number of pills, capsules or tablets a person will comfortably
consume each day. Thus, the dietary supplement consumers (about 70% of U.S.
population) are now shifting their buying power to alternative dosage forms,
loosely referred to as functional foods. In addition to this, a remarkable
phenomenon has occurred. People who do not usually focus upon consuming dietary
supplements for healthful purposes are now actively seeking products that offer
some type of healthful benefit. They are adding to the buying power in the
marketplace. This layered-on group of buyers is focused upon the energy
enhancing effects of functional foods.
Functional
foods represent a convenient and tasty way for people to enrich their diet,
reinforce the feeling they are making healthy dietary choices, and provide
nutritional diversity and richness to their food intake. Witness the rapid
and
sustained growth of the children’s gummy vitamin products (e.g., the vitamin
gummy bears,) powdered vitamin C drink products (e.g., Alacer’s Emergen-C,)
energy and diet bars (e.g., too numerous to mention brands,) and a variety
of
nutraceutical drink products (e.g., Red Bull, SoBe, and others.) This broad
category, loosely characterized as functional foods, has been broadly accepted
by the consumer, embraced by small and large companies, with less stringent
regulation by the U.S.F.D.A.
B
.
C
OMPETITION &
C
OMPETITIVE
A
DVANTAGES
Bond
Laboratories will inevitably encounter competition in each market that they
enter. Patent applications that cover new embodiments of technology will be
pursued wherever possible. While the Company cannot assure that the patents
and
applications will block competitive products, they should help the company
become a significant participant in the marketplace.
The
industry leader is Red Bull with annual sales of approximately $1 billion.
The
other leaders in the category include Monster, (manufactured and distributed
by
Hanson Beverages), RockStar, (now distributed by Coca Cola along with its own
brand ‘Full Throttle’), Amp, (manufactured and distributed by Pepsi) and SoBe,
(also manufactured and distributed by Pepsi). Recognizing that it would be
financially impossible to purchase shelf space in grocery stores or 7/11 stores
on a competitive basis, the Company will be marketing ‘fusion’ to college
students directly with an emphasis on a new form of delivery, higher quality
and
superior taste.
98%
of
all energy products are sold in cans. Fusion is sold as a powder in a convenient
vial, which is poured into cold water at the time of consumption. This gives
‘fusion’ a major advantage that is stressed to the consumers in all marketing
materials. Not only is it easier to carry around a small tube or two, vs.
several cans, (which must stay cold), but cans use science and technology from
over ten years ago. Since 1995, there have been great discoveries in energy
producing nutrients. More important, studies have clearly demonstrated that
most
ingredients are not stable in normal beverage products and that the longer
they
stay in contact with liquid, the less potent they become. These sensitive
substances begin to degrade and lose strength almost immediately when mixed
with
liquid at the time of production. Shelf life and exposure to light promote
further loss of their potency, not to mention how the negative impact
interaction with the aluminum can produces.
Fusion
is
being marketed as the new technology for ‘energy on demand’ to a generation that
responds very positively to this kind of message. In addition, because fusion
is
in a powder, its usage can be expanded far beyond simple consumption as a liquid
like a can. The Web Site for product line, “got-fusion.com” highlights recipes
that include mixing the powder with not only cold water, but with alternatives
such as plain yogurt for breakfast, vanilla ice cream, lemonade, ice tea as
well
as a substitute ingredient for baking sugar cookies.
Packaging
Effective
packaging can be one of the most cost effecting marketing campaigns. ‘Fusion’ is
being sold in Five and Twenty Packs.
The
competition is sold in stores in single cans and in 4-packs. A single can of
Red
Bull or RockStar retails for $1.85-$1.99. A 4-pack retails for $7.50-$7.99.
One
Vial of ‘fusion’ mixed with 8 oz. of cold water is the equivalent to one can of
a competitors drink in volume and ‘buzz’ factor. Fusion is offered:
·
|
3-Vial
Starter set, (one vial of each flavor), with 3 cups and 3 stirrers
for
$5.00
|
·
|
5-Vial
Weekend set, with 5 cups and 5 stirrers for $7.50 - $10.00 depending
on
the venue. (If ordered on the internet, the 5-pack sells for $7.75
plus
shipping and tax where applicable.
|
·
|
20-Vial
set of an individual flavor for
$25.00
|
Initial
Market Reception to Fusion
Fusion
was initially targeted at two different market segments: College students
and Baby Boomers.
Statistics
showed that the majority of energy products were consumed in social
environments, (like bars and clubs) and as a replacement for coffee.
College
Market - Give-away cards were distributed at San Diego State University and
the
University of California at San Diego in February and March of 2006. The card
required the student to log on to the Company web-site to be sent a free sample
pack. 2,500 cards were handed out at each school with approximately 350 students
logging on to the site and providing their mailing address to receive samples,
which equated to 14% at each location.
Unfortunately,
there was very little follow through of actual purchases of product on the
web
site and management concluded that the college market was well trained to
receive free product, but that energy products are spontaneous purchases and
were not willing to wait for delivery.
Baby
Boomers - The Company purchased booth space at three of the largest Street
Fairs
in greater San Diego; the Encinitas Street Fair, The Carlsbad Street Fair and
the Escondido Street Fair. Following the ‘Costco’ model of ‘sample and sell’,
1-2 ounce samples were handed out. 16 ounce pre-mixed cups were sold for $1.50
and boxes of 5 tubes were sold for $7.50. Customers were encouraged to purchase
a cup and walk around the fair for approximately 30 minutes to begin to
appreciate the great feeling that Fusion would give them. They could then come
back with the empty cup and get a $1.50 credit towards the purchase of the
box
of 5 tubes. The results were excellent:
Event
|
|
Samples
|
|
Cups
|
|
Sell
Thru
|
|
Boxes
|
|
Sell
Thru
|
|
Encinitas
Street Faire
|
|
|
2600
|
|
|
250
|
|
|
9.62
|
%
|
|
58
|
|
|
23.20
|
%
|
Carlsbad
Street Faire
|
|
|
2800
|
|
|
265
|
|
|
9.46
|
%
|
|
66
|
|
|
24.91
|
%
|
Escondido
Street Fair
|
|
|
1900
|
|
|
165
|
|
|
8.68
|
%
|
|
45
|
|
|
27.27
|
%
|
Based
on
the results of these street fairs and follow through sales on the internet,
the
target customer has been defined as male or female between the ages of 25 -
60
and is promoted as a positive replacement to coffee.
Feedback
from customers confirms that although Fusion is initially thought of as an
energy drink, it is far superior; not only increasing energy, but providing
a
kind of euphoric feeling without the typical jitters or crash associated with
traditional energy drinks.
The
Power of Bond Laboratories Research and Development
Bond
Laboratories has employed the skills of two of the leading formulators in the
nutraceutical industry to research, develop, and manage the manufacturing of
their products. These two nutraceutical experts have created products for some
of the household names of marketing and retailing, including: Wal*Mart; Costco;
NSA; Mannatech; Mary Kay; Herbalife; Leiner Health Products; CVS; QVC; and
numerous other world-class companies. These two experts are now devoting their
significant skills to Bond Laboratories to create state-of-the-art dietary
supplements and functional foods that address the needs of eager-to-buy niche
consumers in underserved markets.
C.
MANUFACTURING, PRODUCTION, AND QUALITY CONTROL
Instead
of being an obstacle for promising innovations, Bond intends to become a kind
of
incubator for start-ups in the Supplement business. The common element between
the major distributors and the small entrepreneurs are the Contract
Manufacturers, who produce most of the products on the market today. The
majority of their business is made up of high volume commodity products for
Branded Distribution Companies that do no manufacturing of their own. Thus,
start up companies find themselves vying for production time from the same
contract manufacturers that supply their largest potential competitors. In
fact,
most of these Distribution companies do little or no research and development
of
their own, relying instead upon innovations from the Contract Manufacturers
or
copying successful entries to the marketplace from entrepreneurs and small
start-up companies.
The
result is that innovative start-up companies eat up the majority of their
capital on the high cost of formulation and small runs of pre-production lots,
provided they can find a contract manufacturer that has the time and capacity
to
take on smaller new clients. Initial marketing and distribution costs use up
the
remainder of their capital, often preventing them from achieving enough market
penetration to reach the economies of scale necessary for sustained success.
If
they do get to market with a product with ‘legs’, it is inevitable the larger
players will undercut them with similar products very quickly.
Private
Label and Contract Manufacturing Opportunities Abound
While
there is an abundance of capsule and tablet manufacturers in the nutraceutical
marketplace, there is a tremendous scarcity of companies capable of formulating
and packaging products in the individual serving format. Numerous companies
desire to have products that are more convenient than bulk packaged items.
They
wish to offer to the consumer convenience-oriented, single serving products
either for retail sale or for promotional initiatives. The Company will be
a
very attractive partner for the manufacture of this unique packaging. In
addition to having the skills and the innovative product offerings, the Company
will have an environmental advantage, i.e., facility located in a very dry
environment. Virtually all the companies that manufacture powders, and
especially moisture-sensitive powders, have their facilities located in humid
areas. It is very expensive to maintain a low humidity manufacturing environment
in humid geographical areas. As the cost of energy continues to increase, the
cost bar for manufacturing moisture-sensitive products also increases. The
advantage to manufacturing powder products in a low relative humidity
environment means the manufacturing costs are less and the product quality
is
superior. As other companies may seek to provide this type of packaging format,
they will have to compete with us, and we will have a significant
cost-competitive advantage due to desirable environmental conditions.
D.
DISTRIBUTION NETWORK
Pre-established
Distribution Network
In
the
Nutritional Supplement business, it is difficult to bring a new product to
market and sustain differentiation because the base materials are typically
available in the public domain. (Patented materials are rarely if ever marketed
directly by the company that did the development work or sold to an exclusive
end user.) If a start-up company overcomes the obstacles that typically cause
failure, like insufficient capital or lack of strong marketing relationships
to
get their product into the hands of the consuming public, they often find
themselves competing with a major Distribution Company that has brought their
own version of the start-up company’s new product to market several months after
their initial product launch, often at a less expensive retail price because
of
their ability to begin production at cost effective levels.
Not
only
will the company be able to offer a level of research and development expertise
that would normally be unavailable to these entrepreneurs, management
anticipates directing their products to marketing and distribution through
its
pre-existing relationships. Successful in its initial campaign, (5% - 10% market
share), Bond can then capture the contract manufacturing business for the major
distribution companies that will be looking to enter the market with a similar
product, (90% - 95% market share), maximizing the total potential of a products
lifecycle vs. just the initial introduction stages . All services will be
offered to customers on a Fee for Services basis with an ownership participation
option in successful products.
Partners
vs. Representation
Most
new
companies conceive an idea, test market and then seek out a distributor or
attempt to get retail space directly. This means that the brokers who will
represent and support the new product through the distribution channels are
not
directly involved in the development of the product or emotionally invested
in
the lifecycle of the product. By contrast, Bond is partnering in advance with
well established brokers in each of the five major areas of distribution, not
only contracting for their services at market rates, but incentivizing them
with
equity in the company that they can vest into over the course of the success
of
each products life. Too often, the product representative opens the difficult
door for a new product/company, only to watch them grow substantially, but
not
getting the opportunity to participate in the increased overall value of the
‘brand’, due to their initial and ongoing efforts. Management believes that as
initial shareholders in the Company, these distributors will keep its products
at the top of their priority list and take every effort to make sure that new
ideas and concepts are being considered by Bond before anyone else.
E.
ADVERTISING AND MARKETING
Unique
Market Segments; Niches and Gaps
The
nutraceutical and functional food marketplace is rich with groups of consumers
that make up unique market segments. These niches have consumers that are driven
to obtain products that address their specific needs. Consumers within these
segments seek products that may or may not be available from the Food, Drug,
and
Mass marketplace, but are not specifically formulated or marketed to their
unique group. These consumers are usually early adopters who are anxious to
try
new products. The caveat is that the new products need to be very focused upon
the succinct needs of the niche consumers. The gaps in the product offerings
for
the niches are waiting to be filled by Bond Laboratories, Inc.
The
most
prominent and profitable Unique Market Segments are Energy, Pain Relief and
Weight-loss. These three mega-niches command extremely high revenue generation
and typically have meteoric sales for correctly formulated and targeted
products. Since the demise of Ephedra as a key ingredient in energy and weight
loss tablets, capsules, powdered drink mixes, liquids, and functional foods,
the
consumer has been searching for effective alternatives. The result is a $1
billion gap in the Weight Loss category alone.
F.
GOVERNMENT REGULATIONS
To
the
extent that we sell our products outside the U.S., we are subject to the Foreign
Corrupt Practices Act which makes it unlawful for any issuer to corruptly pay
or
offer to pay, any money or anything of value to any foreign official, foreign
political party or official thereof or any candidate for foreign political
office ("Foreign Officials") or any person with knowledge that all or a portion
of such money or thing of value will be offered, given, or promised, directly
or
indirectly, to any Foreign Official.
While
we
have not made any offers, payments, promises to pay, or authorization of any
money or anything of value to any foreign officials, we have implemented a
policy to be followed by the officers, directors, employees and anyone acting
on
our behalf, that no such payments can and will be made. We have made all
employees cognizant of the need for compliance with the Foreign Corrupt
Practices Act and any violation of our policy will result in dismissal. Further,
we conduct periodic reviews of this policy with all employees to ensure full
compliance.
G.
INTERNATIONAL INFLUENCES
The
Company is seeking to establish an international sales base. International
operations and exports to foreign markets are subject to all of the risks
generally associated with doing business abroad, such as foreign government
regulation, economic conditions, currency fluctuations, duties and taxes,
political unrest and disruptions or delays in shipments. These factors, among
others, could influence the Company’s ability to sell its merchandise in
international markets. If any such factors were to render the conduct of the
business in a particular country undesirable or impracticable, there could
be a
material adverse effect on the Company’s business, financial condition and
results of operations. In addition, the majority of the Company’s sales are
derived from the U.S., and most of the Company’s current information on buying
patterns and customer preferences are based on its customers in the U.S. As
a
result, predicting foreign consumer demand may be more difficult for the Company
than predicting U.S. consumer preferences, and there can be no assurance that
the Company’s merchandise or marketing efforts will be successful in foreign
markets.
Our
business extends to the sale of products in foreign markets. Potential future
foreign markets have different regulations related to the environment, labor
relations, currency fluctuations, exchange controls, customs, foreign tax
increases, import and export, investment and taxation which will also subject
us
to increased regulation costs and possibly fines or restrictions on conducting
our operations. Currency fluctuations may have an effect on our current
activities, in that revenues are generally tied to the U.S. dollar. A weakening
of the U.S. dollar (or other foreign currencies) may have an adverse material
effect on the financial condition of the Company.
The
following discussion and analysis of our plan of operations should be read
in
conjunction with our financial statements and related notes appearing elsewhere
in this prospectus. This discussion and analysis contain forward-looking
statements that involve risks, uncertainties and assumptions. Actual results
may
differ materially from those anticipated in these forward-looking statements
as
a result of certain factors, including, but not limited to, those presented
under the heading of “Risk Factors” and elsewhere in this prospectus.
Plan
of Operations
We
were
incorporated in Nevada in July of 2005. The focus of the company has always
been
to develop an alternative nutraceutical dietary supplement delivery platform
vs.
antiquated capsules and pills. Two trends have lead Management to believe an
enormous window of opportunity was developing in the supplement business that
would change consumers’ purchasing habits across the board:
With
the
constant increase in healthcare, consumers were going to focus on prevention
in
greater numbers, to reduce the costs of eventual treatment, increasing their
commitment and consumption of dietary supplements.
Consumers
are living longer, but as they get older, their stomach’s ability to process
capsules and pills reduces. In fact, delivery of supplements through the stomach
is one of the least effective ways for the body to get the benefits of the
ingredients. It is not unusual for 75%+ of the contents to dissipate through
the
liver before traveling to the parts of the body it is intended for.
In
September of 2005, we assembled a core group of individuals with extensive
backgrounds and experience in the Nutraceutical Supplement business to form
our
development team. As we were relying upon limited funds from one of the
principles and a few individuals who had invested with him in the past, everyone
was brought on in a consulting capacity enabling us to maximize our cash by
paying for only time actually used. Several of these people were also granted
founders shares. This kept our initial overhead below $20,000 per month.
It
was
concluded early on, that the Company should limit its focus to the three largest
SKU’s in the Supplement business; Energy, Pain Relief and Diet. The Company
would not focus on commodity products like individual Vitamins A, B, C, D,
E,
etc… as they remain very low margin products with numerous large competitors
dominating the space. Of these three categories, it was determined that Energy
would be the easiest and least expensive product line to introduce first, at
the
same time enabling the Company to explore the challenges of delivering
ingredients through a powder vs. traditional capsules and pills.
When
we
first began our research, there were over 100 Energy drinks on the market,
but
only a handful of powders, of which two dominated the retail market; Zipfizz
and
Rip It, (an extension of the Rip It Energy Drink). Zipfizz sold 20 million
individual serving tubes in 2005. Having determined that the largest groups
of
consumers of Energy drinks were between the ages of 18 and 30 with the majority
of those between 18 and 22, we decided to go target the college markets first.
From September through December we worked on formulations, branding and
packaging. The name for the product we selected was Fusion. Three flavors were
developed, Atomic (a lemon line flavor similar to existing energy drinks on
the
market), Sunrise, (a tangerine/orange flavor and Cosmo, (a strawberry
punch).
In
January of 2006 we completed our packaging, determined pricing and contracted
with a laboratory in Arizona to manufacture our first production. We began
our
first test marketing in February at San Diego State University and the
University of California at San Diego. Cards were handed out on campus that
invited the students to log onto our web site to receive a free sample box
of
Fusion. Approximately 4,000 cards were dispersed that resulted in over 400
responses, a very high percentage based on the fact that the students actually
had to hold onto the card until they got home and then log onto the web site
and
provide their personal contact information.
From
inception to test marketing we expended approximately $150,000.
With
close to a 10% response rate on our ‘Give Away’ cards, we projected that
approximately 10% of those individuals would become customers and place
replacement orders. We were quite disappointed when less than 1% followed
through and were forced to go back and revisit our assumptions. We concluded
that there were three areas that would account for the limited
results:
·
|
Taste/energy
level achieved
|
In
April
we decided to test a new distribution model by selling Fusion at a few local
street fairs. We handed out 2 ounce samples, sold 16 ounce pre-mixed cups and
box sets of 5 tubes, cups and a stirrer. These results were far more positive.
At each fair, we handed out approximately 2,000 samples, sold approximately
200+
cups and about 50 boxes. In each box was a card explaining how to re-order
Fusion from our web site, which several customers continued to do.
We
revamped our marketing and distribution model. Our target consumer became adults
between the ages of 25 and 60. It was also determined that needed develop a
distribution network in advance of bringing the product to market and that
we
must take control of our production. To accomplish the first of these steps,
we
decided to offer equity to certain groups that had distribution relationships
in
the retail outlets that cater to our newly defined target market. They vest
into
their ownership based on their success. We have not asked them to discount
their
services.
In
July,
we signed a lease for a 1,850 sq. ft. warehouse in Murrieta, CA. Blending and
Packaging equipment orders were placed with November delivery dates. By the
end
of November, we anticipate having the warehouse being a fully functional
R&D/Manufacturing/Production lab. Proto-type packaging is being developed
simultaneously. The combined cost of the equipment, raw materials and packaging
equipment will be $150,000. The effect of taking control of our own production
will reduce our cost of goods sold by close to 30%.
Our
sales
to date have been limited to street fairs and internet orders. Although
insignificant in size, these sales have enabled us to identify our true target
customer for the product and attract interest from several potential
distributors of the product. More important, these distributors lack product
lines in Energy, Pain Relief or Diet, but have very positive relationships
with
their customer bases, enabling them to extend their product offering and
allowing the Company to ride on their positive reputations.
We
have
been dependent upon funding from certain stockholders to sustain our operations.
As of August 20, 2006, we owed these stockholders approximately $390,000. These
stockholders are under no obligation to continue to provide funding to us.
These
stockholders have provided us with oral assurances that they will continue
funding our operations up to an additional $375,000. However, we have no legally
binding assurance that they will continue funding us in the near-term or that
the amount, timing and duration of funding from these stockholders will be
adequate to sustain our operations. Our only outstanding debt aside for these
loans is the accrued salary and expenses of our President which totaled $160,000
as of August 1, 2006. None of the proceeds from this offering will be used
to
pay back any loans and our President has agreed to leave his unpaid salary
and
expenses on the books until we have raised a minimum of $1 million. Our current
cash balance will not be sufficient to repay the obligations as they are
currently recognized.
Our
budget through the year 2006 does not rely on proceeds from this offering,
or on
any funds received through exercise of our warrants. However, it does assume
that the $375,000 committed from existing shareholders is received. All new
capital inflows will enable us to accelerate our product development, tests
and
provide us with an opportunity to commence contract manufacturing ahead of
schedule and to expand our pipe line of product candidates.
Completion
of these projects as well as our ability to satisfy our operational and overhead
expense requirements beyond 2006 is dependent on our raising additional capital.
Should we fail to generate sufficient cash inflows either from operations or
through future equity or debt sales, we may not be able to implement our
business plan, complete any of these projects, or sustain our operations through
the second quarter of 2007.
Further
product development and fulfillment of the distribution channels we are planning
to pursue will require us to use the funds received through this offering.
The
research and development/product development and full production costs will
total approximately $2,000,000 to fulfill our strategic goals.
As
discussed in our risk factors, our business operates in a highly competitive
environment. Continued economic slowdown as a result of terrorist attacks,
market decline, the war in Iraq, or a combination thereof appears to have
resulted in a general reduction of external capital available to start-up
nutraceutical companies. In addition, new products or delivery platforms could
be developed which could compete directly with our product candidates,
significantly reducing our potential revenue stream.
|
|
Overhead
Costs.
The Company estimates that our overhead costs over the next two years
will
amount to approximately three million dollars, categorized as
follows:
|
|
|
|
Approximately
$1,100,000 for laboratory rent, equipment, maintenance and materials;
|
|
|
|
Approximately
$900,000 for administrative expenses including salaries, office rent
and
maintenance;
|
|
|
|
Approximately
$1,000,000 in marketing, legal and other expenses, including trademark
filling fees, financing costs and professional fees.
|
Results
of operations
We
are a
development stage company and have generated limited revenues from sales of
our
first product, Fusion. For the years ended December 31, 2005 we generated
no sales. During the first six months of 2006, we had sales of $4,100. Our
future revenue plan is uncertain and is depended on our ability to effectively
introduce our products to our target consumers, generate sales and obtain
contract manufacturing opportunities. The margin for nutraceutical supplement
products depends on the distribution market. In warehouse clubs, the wholesale
margin is less than 30%. In Mass retail which would include Grocery and
convenience stores, the margins are 40%+. In MLM, (Multi-level Marketing),
and
Direct to Consumer, the margins are 50%+. Margins for Contract Manufacturing
are
20-30%.
The
Company incurred losses of approximately $182,000, and $154,000 for the
six-month period ended June 30, 2006 and for the year ended
December 31, 2005, respectively. Our losses since our inception through
June 30, 2006 amounted to $336,000. The increase in the loss from 2005 to
2006 reflects our investment in product development, packaging, contract
manufacturing and marketing. Once our warehouse is fully functional and we
retain a marketing director, our monthly operating expenses are expected to
grow
to $75,000.
Liquidity
and Capital Resources
The
Company has maintained a minimum of three months of working capital in the
bank
since September of 2005. This figure was determined to allow for an adequate
amount of time to secure additional funds from investors as needed. To date,
the
Company has succeeded in securing capital as needed, but there is no guarantee
this will continue. As of June, 2006, the required amount was approximately
$60,000, ($20,000 per month with the President accruing his salary). The company
had a balance of $90,000+ in its bank account at the end of June 2006. Because
the Company continues to rely upon private investors for additional capital
to
grow the business, it can not and will not accept trade credit from any vendors.
All significant purchases are pre-paid or a 50% deposit is made with the balance
available in the bank account.
We
believe we will have to rely on public and private equity and debt financings
to
fund our liquidity requirements over the intermediate term. We may be unable
to
obtain any required additional financings on terms favorable to us or at all.
If
adequate funds are not available on acceptable terms, and if cash and cash
equivalents together with any income generated from operations fall short of
our
liquidity requirements, we may be unable to sustain operations. Continued
negative cash flows could create substantial doubt regarding our ability to
fully implement our business plan and could render us unable to expand our
operations, successfully promote our brand, develop our products and respond
to
competitive pressures or take advantage of acquisition opportunities, any of
which may have a material adverse effect on our business. If we raise additional
funds through the issuance of equity securities, our stockholders may experience
dilution of their ownership interest, and the newly issued securities may have
rights superior to those of our common stock. If we raise additional funds
by
issuing debt, we may be subject to limitations on our operations, including
limitations on the payments of dividends.
Use
of Estimates
Management’s
Discussion and Analysis of Financial Condition and Results of Operations are
based upon our consolidated financial statements, which have been prepared
in
accordance with generally accepted accounting principles in the United States.
When preparing our financial statements, we make estimates and judgments that
affect the reported amounts on our balance sheets and income statements, and
our
related disclosure about contingent assets and liabilities. We continually
evaluate our estimates, including those related to revenue, allowance for
doubtful accounts, reserves for income taxes, and litigation. We base our
estimates on historical experience and on various other assumptions, which
we
believe to be reasonable in order to form the basis for making judgments about
the carrying values of assets and liabilities that are not readily ascertained
from other sources. Actual results may deviate from these estimates if
alternative assumptions or condition are used.
Revenue
Recognition
Revenue
recognized when from product sales is recognized when product is shipped.
Revenue from sales of the product is recorded when shipped and title has passed,
and the Company has no further obligation.
Trademarks
and Other Intangible Assets
Trademarks
with finite useful lives are stated at cost and are amortized using the
straight-line method over the remaining useful lives, ranging from twelve to
nineteen years.
The
Company evaluates the remaining useful life of intangible assets with finite
useful lives each reporting period to determine whether events and circumstances
warrant a revision to the remaining period of amortization. If the evaluation
determines that the intangible asset’s remaining useful life has changed, the
remaining carrying amount of the intangible asset is amortized prospectively
over that revised remaining useful life. The Company evaluates its intangible
assets with finite useful lives for impairment whenever events or other changes
in circumstances indicate that the carrying amount may not be recoverable.
The
testing for impairment includes evaluating the undiscounted cash flows of the
asset and the remaining period of amortization or useful life. The factors
used
in evaluating the undiscounted cash flows include projected future operating
results and cash flows and any other material factors that may effect the
continuity or the usefulness of the asset. If impairment exists, the intangible
asset is written down to its fair value based upon discounted cash flows.
Assets
with infinite lives include manufacturing process which is stated at costs
and
is not amortized, but tested for impairment at least annually as of
December 31 or between annual tests if an event occurs or changes in
circumstances that would indicate that the carrying amount may not be
recoverable. The testing for impairment includes evaluating the undiscounted
cash flows of the asset. The factors used in evaluating the undiscounted cash
flows include projected future operating results and cash flows and any other
material factors that may effect the continuity or the usefulness of the asset.
If impairment exists, the intangible asset is written down to its fair value
based upon discounted cash flows.
FAS
141
Accounting
for Intangible Assets
Initial
Recognition and Measurement of Intangible Assets
An
intangible asset that is acquired either individually or with a group of
other
assets (but not those acquired in a business combination) shall be initially
recognized and measured based on its fair value. General concepts related
to the
initial measurement of assets acquired in exchange transactions, including
intangible assets, are provided in paragraphs 5-7 of Statement 141. The
cost of
a group of assets acquired in a transaction other than a business combination
shall be allocated to the individual assets acquired based on their relative
fair values and shall not give rise to goodwill. Intangible assets acquired
in a
business combination are initially recognized and measured in accordance
with
Statement 141.
Determining
the Useful Life of an Intangible Asset
The
accounting for a recognized intangible asset is based on its useful life
to the
reporting entity. An intangible asset with a finite useful life is amortized;
an
intangible asset with an indefinite useful life is not amortized. The
useful
life of an intangible asset to an entity is the period over which the
asset is
expected to contribute directly or indirectly to the future cash flows
of that
entity. The estimate of the useful life of an intangible asset to an
entity
shall be based on an analysis of all pertinent factors, in
particular:
a.
The
expected use of the asset by the entity
b.
The
expected useful life of another asset or a group of assets to which the
useful
life of the intangible asset may relate (such as mineral rights to depleting
assets)
c.
Any
legal, regulatory, or contractual provisions that may limit the useful
life
d.
Any
legal, regulatory, or contractual provisions that enable renewal or extension
of
the asset’s legal or contractual life without substantial cost (provided there
is evidence to support renewal or extension and renewal or extension
can be
accomplished without material modifications of the existing terms and
conditions)
e.
The
effects of obsolescence, demand, competition, and other economic factors
(such
as the stability of the industry, known technological advances, legislative
action that results in an uncertain or changing regulatory environment,
and
expected changes in distribution channels)
f.
The
level of maintenance expenditures required to obtain the expected future
cash
flows from the asset (for example, a material level of required maintenance
in
relation to the carrying amount of the asset may suggest a very limited
useful
life). If no legal, regulatory, contractual, competitive, economic, or
other
factors limit the useful life of an intangible asset to the reporting
entity,
the useful life of the asset shall be considered to be indefinite. The
term
indefinite
does
not
mean infinite. Appendix A includes illustrative examples of different
intangible
assets and how they should be accounted for in accordance with this Statement,
including determining whether the useful life of an intangible asset
is
indefinite.
In
accordance with SFAS 141 Goodwill and other intangible assets the company
capitalized the logo and website. The company measured the fair value
at the
cost of the development of the logo and website. The company conservatively
valued this at historical cost basis. Further the intangible asset gave
rise to
subsequent and future cash flow as reported in our June 30, 2006 interim
financial statements. During this interim period of June 30, 2006 the
company
recognized nearly 5,000 in revenue and has continued to recognize revenue
through out the fiscal period. The Company paid for the website and logo
to
create a brand awareness of its infusion product. Through this brand
awareness
the company has successfully generated ecommerce sales through its website
and
logo exposure.
Net
Income (Loss) Per Share
The
Company has presented basic and diluted net income (loss) per share pursuant
to
SFAS No. 128, “Earnings per Share,” and the Securities and Exchange
Commission SAB No. 98. In accordance with SFAS No. 128, basic net
income (loss) per share has been computed by dividing net income (loss) by
the
weighted-average number of shares of common stock outstanding during the period.
Diluted net income (loss) per share includes the effect, if any, from the
potential exercise or conversion of securities, such as stock options, which
would result in the issuance of shares of common stock.
Basic
and
diluted loss per share is based on the net loss divided by the weighted average
number of common shares outstanding during the period. No effect has been given
to outstanding potential common shares such as options, warrants and convertible
instruments in the diluted computation as their effect would be antidilutive.
Off-Balance
Sheet Arrangements
We
have
not entered into any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes
in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources and would be considered material
to
investors. Certain officers and directors of the Company have provided personal
guarantees to our various lenders as required for the extension of credit to
the
Company.
DESCRIPTION
OF PROPERTY
The
Company operates as a company headquartered in Solana Beach, CA. On May 17,
2006, the Company signed a one year lease to rent space for $1,570 per month.
On
July 3, 2006 the company entered into a lease for 1,875 of office warehouse
space in Murrieta, CA. The term of the lease is for two years with rent of
$1968.75 per month beginning September 1, 2006.
MARKET
FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
No
Public Market for Common Stock
There
is
presently no public market for our common stock. We anticipate applying for
trading of our common stock on the over the counter bulletin board upon the
effectiveness of the registration statement of which this prospectus forms
a
part. However, we can provide no assurance that our shares will be traded on
the
bulletin board or, if traded, that a public market will materialize.
Stockholders
of Our Common Shares
As
of the
date of this registration statement, we have 28 registered shareholders.
Rule
144 Shares
Apart
from the founder’s shares, most of our common stock will be available for resale
to the public in accordance with the volume and trading limitations of Rule
144
of the Securities Act of 1933, as amended. In general, under Rule 144 as
currently in effect, a person who has beneficially owned shares of a company’s
common stock for at least one year is entitled to sell within any three month
period a number of shares that does not exceed the greater of:
1.
1% of
the number of shares of the company’s common stock then outstanding which, in
our case, will equal approximately 60,000 shares of common stock as of the
date
of this prospectus; or
2.
the
average weekly trading volume of the company’s common stock during the four
calendar weeks preceding the filing of a notice on Form 144 with respect to
the
sale.
Sales
under Rule 144 are also subject to manner of sale provisions and notice
requirements and to the availability of current public information about our
company.
Under
Rule 144(k), a person who is not one of our company’s affiliates at any time
during the three months preceding a sale, and who has beneficially owned the
shares proposed to be sold for at least two years, is entitled to sell shares
without complying with the manner of sale, public information, volume limitation
or notice provisions of Rule 144.
Stock
Option Grants
Registration
Rights
We
have
not granted registration rights to our shareholders or to any other persons.
INTERESTS
OF NAMED EXPERTS AND COUNSEL
None
of
the experts named herein was or is a promoter, underwriter, voting trustee,
director, officer or employee of our company. Further, none of the experts
was
hired on a contingent basis and none of the experts named herein will receive
a
direct or indirect interest in our company.
Legal
Matters
The
validity of the common stock offered hereby will be passed upon for us by our
independent legal counsel, Joseph I. Emas, Esq., 1224 Washington Avenue, Miami
Beach, Florida.
Accounting
Matters
Our
financial statements as of December 31, 2005, included in this prospectus
have been audited by Jewett Schwartz & Associates, an independent Registered
Public Accounting Firm, as set forth in their report included herein, which
contains an explanatory paragraph relating to the existence of substantial
doubt
about our ability to continue as a going concern. The financial statements
referred to above are included in reliance on the report of such firm given
on
their authority as experts in accounting and auditing.
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
We
have
had no disagreements on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedures with any of
our
accountants for the year ended December 31, 2005.
We
have
not had any other changes in nor have we had any disagreements, whether or
not
resolved, with our accountants on accounting and financial disclosures during
our two recent fiscal years or any later interim period.
ADDITIONAL
INFORMATION
Currently,
we are not required to deliver our annual report to security holders. However,
we will voluntarily send an annual report, including audited financial
statements, to any shareholder that requests it. We are subject to the
information requirements of the Securities Exchange Act of 1934 and in
accordance therewith will file reports, proxy statements and other information
with the Commission and provide shareholders with the information required
under
the Securities Act of 1934.
We
are
filing this registration statement on form SB-2 under the Securities Act of
1933, as amended, with the Securities and Exchange Commission with respect
to
the shares of our common stock offered through this prospectus. This prospectus
is filed as a part of that registration statement and does not contain all
of
the information contained in the registration statement and exhibits. Statements
made in this registration statement are summaries of the material terms of
the
referenced contracts, agreements or documents of Bond Corp. and are not
necessarily complete. We refer you to our registration statement and each
exhibit attached to it for a more detailed description of matters involving
Bond
Corp., and the statements we have made in this prospectus are qualified in
their
entirety by reference to these additional materials.
BOND
LABORATORIES, INC.
(A
DEVELOPMENT STAGE COMPANY)
FINANCIAL
STATEMENTS
DECEMBER
31, 2005
TABLE
OF
CONTENTS
|
|
Page
|
|
Report
of Independent Registered Public Accounting Firm
|
|
|
2
|
|
|
|
|
|
|
Balance
Sheets
|
|
|
3
|
|
|
|
|
|
|
Statements
of Operations
|
|
|
4
|
|
|
|
|
|
|
Statements
of Changes in Shareholders’ Deficiency
|
|
|
5
|
|
|
|
|
|
|
Statements
of Cash Flows
|
|
|
6
|
|
|
|
|
|
|
Notes
to Financial Statements
|
|
|
7
- 13
|
|
REPORT
OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the
board of directors and shareholders of
Bond
Laboratories, Inc.
We
have
audited the accompanying balance sheet of Bond Laboratories, Inc. (A Development
Stage Company) as of December 31, 2005 and the related statements of operations,
changes in shareholders' deficiency and cash flows for the period ended from
July 16, 2005 (inception) through December 31, 2005. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In
our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Bond Laboratories, Inc. (A
Development Stage Company) for the period from July 26, 2005 (inception) through
December 31, 2005 and the results of its operations and its cash flows for
the
period then ended in conformity with accounting principles generally accepted
in
the United States of America.
These
financial statements have been prepared assuming that the Company will continue
as a going concern. As discussed in Note 2 to the financial statements, the
Company has operating and liquidity concerns, has incurred in net loss of
$153,735 during the period July 26, 2005 through December 31, 2005. These
factors raise substantial doubt about the ability of the Company to continue
as
a going concern. The financial statements do not include any adjustments that
might result from the outcome of these uncertainties. In this regard, Management
is proposing to raise any necessary additional funds through loans and
additional sales of its common stock. There is no assurance that the Company
will be successful in raising additional capital.
/s/
Jewett, Schwartz & Associates
Hollywood,
Florida
August
24, 2006
BOND
LABORATORIES, INC.
|
(A
Development Stage Company)
|
|
|
BALANCE
SHEET
|
|
|
|
December
31,
2005
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
Cash
|
|
$
|
35,309
|
|
Total
current assets
|
|
|
35,309
|
|
|
|
|
|
|
Intangible
Assets- Net
|
|
|
6,925
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
$
|
42,234
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' DEFICIT:
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
Accounts
payable
|
|
$
|
4,081
|
|
Accrued
liabilities
|
|
|
80,000
|
|
Total
current Liabilities
|
|
|
84,081
|
|
Loans
payable - Related Party
|
|
|
111,868
|
|
|
|
|
|
|
Total
Liabilities
|
|
|
195,949
|
|
|
|
|
|
|
STOCKHOLDERS'
DEFICIT:
|
|
|
|
|
Common
stock, $.01 par value, 2,000 shares
|
|
|
|
|
authorized
2,000 issued and outstanding
|
|
|
20
|
|
Accumulated
deficit
|
|
|
(153,735
|
)
|
Total
stockholders' deficit
|
|
|
(153,715
|
)
|
|
|
|
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
|
$
|
42,234
|
|
|
|
|
|
|
See
accompaying notes to financial statements.
BOND
LABORATORIES, INC.
|
|
(A
Development Stage Company)
|
|
|
|
|
|
STATEMENT
OF OPERATIONS
|
|
|
|
|
|
|
|
For
the Period
|
|
|
|
from
July 26, 2005
|
|
|
|
(inception)
to
|
|
|
|
December
31, 2005
|
|
|
|
|
|
REVENUES:
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
-
|
|
Total
|
|
|
-
|
|
|
|
|
|
|
OPERATING
EXPENSES:
|
|
|
|
|
General
and Administrative
|
|
|
140,038
|
|
Selling
and Marketing
|
|
|
161
|
|
Total
operating expenses
|
|
|
140,199
|
|
OPERATING
LOSS
|
|
|
(140,199
|
)
|
|
|
|
|
|
OTHER
INCOME AND (EXPENSES)
|
|
|
|
|
Interest
Expense
|
|
|
(1,613
|
)
|
Research
and Development
|
|
|
(11,923
|
)
|
Total
other expense
|
|
|
(13,536
|
)
|
|
|
|
|
|
LOSS
BEFORE INCOME TAXES
|
|
|
(153,735
|
)
|
|
|
|
|
|
INCOME
TAX (BENEFIT) PROVISION
|
|
|
-
|
|
|
|
|
|
|
NET
LOSS
|
|
$
|
(153,735
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average common shares outstanding
|
|
|
|
|
Basic
and diluted
|
|
|
2,000
|
|
|
|
|
|
|
Basic
loss per share
|
|
|
(76.87
|
)
|
|
|
|
|
|
See
accompaying notes to financial statements.
BOND
LABORATORIES, INC.
|
|
(A
Development Stage Company)
|
|
|
|
STATEMENT
OF CASH FLOWS
|
|
|
|
|
|
|
|
For
the Period
|
|
|
|
from
July 26, 2005
|
|
|
|
(inception)
to
|
|
|
|
December
31, 2005
|
|
|
|
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(153,735
|
)
|
Adjustments
to reconcile net income to net cash
|
|
|
|
|
(used
in) operating activities:
|
|
|
|
|
Changes
in assets and liabilities:
|
|
|
|
|
Accounts
payable
|
|
|
4,081
|
|
Accrued
liabilities
|
|
|
80,000
|
|
Net
cash (used in) operating activities
|
|
|
(69,654
|
)
|
|
|
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
Purchase
of intangible asset
|
|
|
(6,925
|
)
|
Net
cash (used in) investing activities
|
|
|
(6,925
|
)
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
Issuances
of common stock
|
|
|
20
|
|
Proceeds
from related party loans
|
|
|
111,868
|
|
Net
cash provided by financing activities
|
|
|
111,888
|
|
|
|
|
|
|
INCREASE
IN CASH
|
|
|
35,309
|
|
CASH,
BEGINNING OF YEAR
|
|
|
-
|
|
CASH,
END OF YEAR
|
|
$
|
35,309
|
|
|
|
|
|
|
|
|
|
|
|
Cash
paid for interest
|
|
$
|
1,613
|
|
Cash
paid for income taxes
|
|
$
|
-
|
|
See
accompaying notes to financial statements.
BOND
LABORATORIES, INC.
(A
Development Stage Company)
STATEMENTS
OF CHANGES IN SHAREHOLDERS' DEFICIENCY
|
|
Common
Stock
|
|
|
|
Total
|
|
|
|
2,000
shares authorized
|
|
Accumulated
|
|
Shareholders'
|
|
|
|
Shares
|
|
$0.01
par value
|
|
Deficit
|
|
Deficiency
|
|
|
|
|
|
|
|
|
|
|
|
Balance
- July 26, 2005 (Inception)
|
|
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
shares issued at par value
|
|
|
2,000
|
|
|
20
|
|
|
-
|
|
|
20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
-
|
|
|
-
|
|
|
(153,735
|
)
|
|
(153,735
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
- December 31, 2005
|
|
|
2,000
|
|
$
|
20
|
|
$
|
(153,735
|
)
|
$
|
(153,715
|
)
|
See
accompaying notes to financial statements.
NOTE
1 -
BACKGROUND
Bond
Laboratories, Inc. (A Development Stage Company) was incorporated in the state
of Nevada on July 26, 2005. The Company is a development stage company. The
company has started research and development of energy drinks. The company
has
not begun the process of operating this business and is still in the process
of
research the best formula for market production.
Bond
Laboratories is building a Nutraceutical Dietary Supplement business catering
to
all five of the major distribution channels focusing on the three major
categories of the industry; Energy, Pain Relief and Weight loss, utilizing
a
state of the art, alternative delivery method vs. antiquated capsules and
pills.
NOTE
2 -
GOING CONCERN
The
accompanying financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of America which
contemplate continuation of the Company as a going concern. However, the Company
has year end losses from operations and had no revenues from operations in
2005.
During the period July 26, 2005 through December 31, 2005 the Company incurred
net loss of $153,735. Further, the Company has inadequate working capital to
maintain or develop its operations, and is dependent upon funds from private
investors and the support of certain stockholders.
These
factors raise substantial doubt about the ability of the Company to continue
as
a going concern. The financial statements do not include any adjustments that
might result from the outcome of these uncertainties. In this regard, Management
is proposing to raise any necessary additional funds through loans and
additional sales of its common stock. There is no assurance that the Company
will be successful in raising additional capital.
NOTE
3 -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The
Company prepares its financial statements in accordance with accounting
principles generally accepted in the United States of America. Significant
accounting policies are as follows:
Use
of
Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of
the financial statements. These estimates and assumptions also affect the
reported amounts of revenues, costs and expenses during the reporting period.
Management evaluates these estimates and assumptions on a regular basis. Actual
results could differ from those estimates
NOTE
3 -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Revenue
Recognition
The
Company recognizes revenue in accordance with provision of SAB 104, product
is
shipped and title passes to the customers.
Advertising
Costs
All
advertising costs are charged to expense as incurred. Advertising expense for
the year ended December 31, 2005 was
$161
.
Cash
and Cash Equivalents
The
Company considers all highly liquid investments with an original maturity of
three months or less to be cash equivalents. At December 31, 2005, cash and
cash
equivalents include cash on hand and cash in the bank.
Property
and Equipment
Property
and equipment is recorded at cost and depreciated over the estimated useful
lives of the assets using principally the straight-line method. When items
are
retired or otherwise disposed of, income is charged or credited for the
difference between net book value and proceeds realized thereon. Ordinary
maintenance and repairs are charged to expense as incurred, and replacements
and
betterments are capitalized. The range of estimated useful lives used to
calculated depreciation for principal items of property and equipment are as
follow:
Asset
Category
|
|
Depreciation/
Amortization Period
|
|
Furniture
and Fixture
|
|
|
3
Years
|
|
Office
equipment
|
|
|
3
Years
|
|
Leasehold
improvements
|
|
|
5
Years
|
|
Long-Lived
Assets
The
Company's accounting policy regarding the assessment of the recoverability
of
the carrying value of long-lived assets, including property and equipment and
purchased intangible assets with finite lives, is to review the carrying value
of the assets if the facts and circumstances suggest that they may be impaired.
If this review indicates that the carrying value will not be recoverable, as
determined based on the projected undiscounted future cash flows, the carrying
value is reduced to its estimated fair value.
NOTE
3 -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Intangible
Assets
The
Company adopted Statement of Financial Accounting Standard (“SFAS”) No. 142,
Goodwill
and Other Intangible Assets
,
effective July 1, 2002. As a result, the Company discontinued amortization
of
goodwill, and instead annually evaluates the carrying value of goodwill for
impairment, in accordance with the provisions of SFAS No. 142.
FAS
141
Accounting
for Intangible Assets
Initial
Recognition and Measurement of Intangible Assets
An
intangible asset that is acquired either individually or with a group
of other
assets (but not those acquired in a business combination) shall be
initially
recognized and measured based on its fair value. General concepts
related to the
initial measurement of assets acquired in exchange transactions,
including
intangible assets, are provided in paragraphs 5-7 of Statement 141.
The cost of
a group of assets acquired in a transaction other than a business
combination
shall be allocated to the individual assets acquired based on their
relative
fair values and shall not give rise to goodwill. Intangible assets
acquired in a
business combination are initially recognized and measured in accordance
with
Statement 141.
Determining
the Useful Life of an Intangible Asset
The
accounting for a recognized intangible asset is based on its useful life
to the
reporting entity. An intangible asset with a finite useful life is amortized;
an
intangible asset with an indefinite useful life is not amortized. The
useful
life of an intangible asset to an entity is the period over which the
asset is
expected to contribute directly or indirectly to the future cash flows
of that
entity. The estimate of the useful life of an intangible asset to an
entity
shall be based on an analysis of all pertinent factors, in
particular:
a.
The
expected use of the asset by the entity
b.
The
expected useful life of another asset or a group of assets to which the
useful
life of the intangible asset may relate (such as mineral rights to depleting
assets)
c.
Any
legal, regulatory, or contractual provisions that may limit the useful
life
d.
Any
legal, regulatory, or contractual provisions that enable renewal or extension
of
the asset’s legal or contractual life without substantial cost (provided there
is evidence to support renewal or extension and renewal or extension
can be
accomplished without material modifications of the existing terms and
conditions)
e.
The
effects of obsolescence, demand, competition, and other economic factors
(such
as the stability of the industry, known technological advances, legislative
action that results in an uncertain or changing regulatory environment,
and
expected changes in distribution channels)
f.
The
level of maintenance expenditures required to obtain the expected future
cash
flows from the asset (for example, a material level of required maintenance
in
relation to the carrying amount of the asset may suggest a very limited
useful
life). If no legal, regulatory, contractual, competitive, economic, or
other
factors limit the useful life of an intangible asset to the reporting
entity,
the useful life of the asset shall be considered to be indefinite. The
term
indefinite
does
not
mean infinite. Appendix A includes illustrative examples of different
intangible
assets and how they should be accounted for in accordance with this Statement,
including determining whether the useful life of an intangible asset
is
indefinite.
In
accordance with SFAS 141 Goodwill and other intangible assets the company
capitalized the logo and website. The company measured the fair value
at the
cost of the development of the logo and website. The company conservatively
valued this at historical cost basis. Further the intangible asset gave
rise to
subsequent and future cash flow as reported in our June 30, 2006 interim
financial statements. During this interim period of June 30, 2006 the
company
recognized nearly 5,000 in revenue and has continued to recognize revenue
through out the fiscal period. The Company paid for the website and logo
to
create a brand awareness of its infusion product. Through this brand
awareness
the company has successfully generated ecommerce sales through its website
and
logo exposure.
Research
and Development
Costs
are
expensed as incurred. Research and Development expense for the year ended
December 31, 2005 was $11,923.
Income
Taxes
Deferred
income taxes are provided based on the provisions of SFAS No. 109, "Accounting
for Income Taxes" ("SFAS 109"), to reflect the tax effect of differences in
the
recognition of revenues and expenses between financial reporting and income
tax
purposes based on the enacted tax laws in effect at December 31,
2005.
Earnings
Per Share
Basic
earnings per share is computed by dividing net income (loss) available to common
shareholders by the weighted average number of common shares outstanding during
the reporting period. Diluted earnings per share reflects the potential dilution
that could occur if stock options and other commitments to issue common stock
were exercised or equity awards vest resulting in the issuance of common stock
that could share in the earnings of the Company. As of December 31, 2005, there
were no potential dilutive instruments that could result in share
dilution.
Fair
Value of Financial Instruments
The
fair
value of a financial instrument is the amount at which the instrument could
be
exchanged in a current transaction between willing parties other than in a
forced sale or liquidation.
The
carrying amounts of the Company’s financial instruments, including cash,
accounts payable and accrued liabilities, income tax payable and related party
payable approximate fair value due to their most maturities.
NOTE
3 -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Recent
Accounting Pronouncements
Share-Based
Payment
In
December 2004, the FASB issued SFAS No. 123 (revised 2004), “Share—Based
Payment” (“SFAS No. 123(R)”). This statement is a revision of SFAS
No. 123, “Accounting for Stock—Based Compensation,” and supersedes APB
Opinion No. 25, “Accounting for Stock Issued to Employees,” and its related
implementation guidance. In March 2005, the Securities and Exchange Commission
(“SEC”) issued Staff Accounting Bulletin (“SAB”) No. 107, which expresses
the staff’s views on interactions between SFAS No. 123(R) and certain SEC
rules and regulations and provides interpretations of the valuation of
share-based payments for public companies. SFAS No. 123(R) will require
Bond to measure all stock-based compensation awards using a fair value method
and record such expense in its consolidated financial statements. In addition,
the adoption of SFAS No. 123(R) will require additional accounting related
to the income tax effects and additional disclosure regarding the cash flow
effects resulting from share-based payment arrangements. In April 2005, the
SEC
extended the effective date for SFAS No. 123(R), and the statement is
effective as of January 1, 2006 for Bond.
The
effects of the adoption of SFAS No. 123(R) on Bond’s results of operations
and financial position are dependent upon a number of factors, including the
number of employee stock options outstanding and unvested, the number of
stock-based awards which may be granted in the future, the life and vesting
features of stock-based awards which may be granted in the future, the future
market value and volatility of Bond’s stock, movements in the risk free rate of
interest, award exercise and forfeiture patterns, and the valuation model used
to estimate the fair value of each award. Bond is currently evaluating these
variables in the design of its stock-based compensation program as well as
the
accounting requirements under SFAS No. 123(R) and SAB No. 107. In
addition, Bond intends to utilize restricted stock units as a key component
of
its ongoing employee stock-based compensation plan. These awards generally
are
recognized at their fair value, equal to the quoted market price of Bond’s
common stock on the date of issuance, and this amount is amortized over the
vesting period of the shares of restricted stock held by the grantee. Bond
believes that the adoption of SFAS No. 123(R) will have a material impact
on its financial statements.
Non-monetary
Exchange
In
December 2004, the FASB issued SFAS No. 153, “Exchanges of Nonmonetary
Assets, an amendment of APB Opinion No. 29.” The amendments made by SFAS
No. 153 eliminate the exception for nonmonetary exchanges of similar
productive assets and replace it with a general exception for exchanges of
nonmonetary assets that do not have commercial substance. A nonmonetary exchange
has commercial substance if the future cash flows of the entity are expected
to
change significantly as a result of the exchange. The provisions of this
statement became effective for nonmonetary asset exchanges occurring in Bond’s
fourth quarter of 2005. The adoption of SFAS No. 153 did not have a
material impact on Bond’s financial statements.
Conditional
Asset Retirement
In
March
2005, the FASB issued FASB Interpretation (FIN) No. 47 - "Accounting for
Conditional Asset Retirement Obligations - an Interpretation of SFAS 143 (FIN
No. 47). FIN No. 47 clarifies the timing of liability recognition for legal
obligations associated with the retirement of a tangible long-lived asset when
the timing and/or method of settlement are conditional on a future event. FIN
No. 47 is effective no later than December 31, 2005. FIN No. 47 did not impact
the Company for the year ended December 31, 2005.
Accounting
Changes and Error Corrections
In
May
2005, the FASB issued SFAS No. 154, “Accounting Changes and Error
Corrections.” This statement replaces APB Opinion No. 20, “Accounting
Changes”, and SFAS No. 3, “Reporting Accounting Changes in Interim
Financial Statements,” and changes the requirements for the accounting for and
reporting of a change in accounting principle. This statement applies to all
voluntary changes in accounting principles. It also applies to changes required
by an accounting pronouncement in the unusual instance that the pronouncement
does not include specific transition provisions. When a pronouncement includes
specific transition provisions, those provisions should be followed. SFAS
No. 154 requires retrospective application to prior periods’ financial
statements of voluntary changes in accounting principles. SFAS No. 154 is
effective for accounting changes and corrections of errors made during 2007,
beginning on January 1, 2007. Bond does not believe the adoption of SFAS
No. 154 will have a material impact on its financial
statements.
Inventory
Cost
In
November 2004, the FASB issued SFAS No. 151, “Inventory Costs—an
Amendment of ARB No. 43, Chapter 4.” SFAS No. 151 amends
Accounting Research Bulletin (“ARB”) No. 43, Chapter 4, to clarify
that abnormal amounts of idle facility expense, freight, handling costs, and
wasted materials (spoilage) should be recognized as current-period charges.
In addition, this statement requires that allocation of fixed production
overheads to the costs of conversion be based on the normal capacity of the
production facilities. The provisions of this statement are effective for
inventory costs incurred beginning in Bond’s first quarter of 2006. Bond does
not believe that the adoption of SFAS No. 151 will have a material impact
on its financial statements.
NOTE
4 -
NOTES PAYABLES
Notes
payable at December 31, 2005 comprise the following:
|
|
December
31, 2005
|
|
Convertible
note payable to individual. The note bears interest at 6% per annum
and is
payable at the time of conversion. The note is convertible to common
stock
at $50% of the initial public offering. The Note was executed on
October
5, 2005.
|
|
$
|
50,000
|
|
Note
payable to Small World Traders. Is a revolving loan commitment up
to
$250,000 and is due and payable on December 31.2006. Collateralized
by all
the assets of the company. Original principal balance of $60,000.
The note
bears interest at 8% per annum and requires no monthly principal
and
interest payments. The company has accrued all interest due through
December 31, 2005.
|
|
|
61,868
|
|
|
|
|
|
|
Totals
|
|
$
|
111.868
|
|
NOTE
5 -
RELATED PARTY
Bond
is
managed by its key shareholder and as of December 31, 2005 its sole shareholder,
officer and director. This shareholder is the sole shareholder of Small World
Traders.
NOTE
6 -
INCOME TAXES
The
provision (benefit) for income taxes from continued operations for the years
ended December 31, 2005 consist of the following:
|
|
December
31,
|
|
|
|
2005
|
|
Current:
|
|
|
|
|
Federal
|
|
|
-
|
|
Deferred:
|
|
|
|
|
Federal
|
|
$
|
61,500
|
|
|
|
|
|
|
Tax
(benefit) from the
decrease
in valuation allowance
|
|
|
(61,500
|
)
|
Provision
(benefit) for income taxes, net
|
|
|
-
|
|
The
difference between income tax expense computed by applying the federal statutory
corporate tax rate and actual income tax expense is as follows:
|
|
December
31,
|
|
|
|
2005
|
|
|
|
|
|
Statutory
federal income tax rate
|
|
|
35.0
|
%
|
Increase
in valuation allowance
|
|
|
(35.0
|
)%
|
Effective
tax rate
|
|
|
-
|
%
|
Other
includes tax rate differentials and the true-up of permanent tax differences
from prior periods
NOTE
6 -
INCOME TAXES - continued
Deferred
income taxes result from temporary differences in the recognition of income
and
expenses for the financial reporting purposes and for tax purposes. The tax
effect of these temporary differences representing deferred tax asset and
liabilities result principally from the following:
|
|
December
31,
|
|
|
|
2005
|
|
|
|
|
|
Net
operating loss carry-forwards
|
|
|
(153,735
|
)
|
|
|
|
|
|
The
Company has a net operating loss carry-forward of approximately $153,735
available to offset future taxable income through 2019.
NOTE
7 -
COMMITMENTS AND CONTIGENCIES
The
Company has entered into various consulting agreements with outside consultants.
However, certain of these agreements included additional compensation on the
basis of performance. The consulting agreement are with key shareholders that
are instrumental to the success of the company and its development of it
product
NOTE
8 -
SUBSEQUENT EVENT
Th
e
company’s management consisted of Scott Landow CEO. The company has changed its
capitalization and issued additional 4,998,000 common shares and 5,000,000
preferred shares to related entities and individuals that are key to the success
to this development stage company.
BOND
LABORATORIES, INC.
Development
Stage Company
TABLE
OF CONTENTS
|
|
Page
|
|
|
|
|
|
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM:
|
|
|
|
|
Jewett,
Schwartz & Associates CPAs
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED
FINANCIAL STATEMENTS:
|
|
|
|
|
Balance
Sheet at June 30, 2006
|
|
|
F-3
|
|
|
|
|
|
|
Statements
of Operations for the three and six months ended
|
|
|
|
|
June
30, 2006
|
|
|
F-4
|
|
|
|
|
|
|
Statements
of Stockholders’ Equity for the six months ended
|
|
|
|
|
June
30, 2006
|
|
|
F-5
|
|
|
|
|
|
|
Statements
of Cash Flows for the six months ended
|
|
|
|
|
June
30, 2006
|
|
|
F-6
|
|
|
|
|
|
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
F-7
|
|
BALANCE
SHEET
Development
Stage Company
|
|
June
30, 2006
|
|
ASSETS
|
|
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
Cash
|
|
$
|
83,258
|
|
Total
current assets
|
|
|
83,258
|
|
|
|
|
|
|
Intangible
Assets- Net
|
|
|
11,249
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
$
|
94,507
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY:
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
Accrued
Liabilities
|
|
$
|
155,000
|
|
Total
current liabilities
|
|
|
155,000
|
|
Loans
Payable - Related Party
|
|
|
279,635
|
|
|
|
|
|
|
Total
liabilities
|
|
|
434,635
|
|
|
|
|
|
|
STOCKHOLDERS'
DEFICIT:
|
|
|
|
|
Common
stock, $.01 par value, 2,000 shares
|
|
|
|
|
authorized
2,000 issued 2,000 outstanding
|
|
|
20
|
|
|
|
|
-
|
|
Paid
in capital
|
|
|
-
|
|
Accumulated
deficit
|
|
|
(340,148
|
)
|
Total
stockholders' deficit
|
|
|
(340,128
|
)
|
|
|
|
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
|
$
|
94,507
|
|
|
|
|
|
|
See
accompanying auditors' report and notes to the financial
statements.
BOND
LABORATORIES, INC.
STATEMENT
OF OPERATIONS
Development
Stage Company
FOR
THE THREE AND SIX MONTHS ENDED JUNE 30, 2006
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
Six
Months Ended
|
|
|
|
2006
|
|
2006
|
|
REVENUES:
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$
|
1,996
|
|
$
|
4,440
|
|
|
|
|
1,996
|
|
|
4,440
|
|
|
|
|
|
|
|
|
|
COST
OF SALES:
|
|
|
303
|
|
|
3,166
|
|
|
|
|
|
|
|
|
|
GROSS
PROFIT
|
|
|
1,693
|
|
|
1,274
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES:
|
|
|
|
|
|
|
|
General
and administrative
|
|
|
49,452
|
|
|
149,047
|
|
Sales
and marketing
|
|
|
1,236
|
|
|
1,794
|
|
Depreciation
and amortization
|
|
|
617
|
|
|
1,101
|
|
Total
operating expenses
|
|
|
51,305
|
|
|
151,942
|
|
|
|
|
|
|
|
|
|
OPERATING
LOSS
|
|
|
(49,612
|
)
|
|
(150,668
|
)
|
|
|
|
|
|
|
|
|
OTHER
(INCOME) AND EXPENSES
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
3,541
|
|
|
6,678
|
|
Research
and Development
|
|
|
24,421
|
|
|
24,421
|
|
Total
other expense
|
|
|
27,962
|
|
|
31,100
|
|
|
|
|
|
|
|
|
|
NET
LOSS
|
|
|
(77,575
|
)
|
|
(181,768
|
)
|
|
|
|
|
|
|
|
|
NET
LOSS PER SHARE:
|
|
|
|
|
|
|
|
Basic:
|
|
$
|
(38.79
|
)
|
$
|
(90.88
|
)
|
|
|
|
|
|
|
|
|
Diluted:
|
|
$
|
(38.79
|
)
|
$
|
(90.88
|
)
|
|
|
|
|
|
|
|
|
Weighted
Average Common Shares Outstanding
|
|
|
|
|
|
|
|
Basic
|
|
|
2,000
|
|
|
2,000
|
|
Diluted
|
|
|
2,000
|
|
|
2,000
|
|
|
|
|
|
|
|
|
|
See
accompanying auditors' report and notes to the financial
statements.
Development
Stage Company
STATEMENT
OF STOCKHOLDERS’ EQUITY FOR
FOR
THE SIX MONTHS ENDED JUNE 30, 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Stock
|
|
|
|
|
|
Paid-in
|
|
|
|
Treasury
|
|
|
|
Accumulated
|
|
|
|
|
|
Shares
|
|
|
|
Amount
|
|
|
|
|
|
Capital
|
|
|
|
Stock
|
|
|
|
Deficit
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
-
|
|
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
Stock
Issued July 26, 2005
|
|
|
2,000
|
|
|
|
|
|
20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20
|
|
2005
Accumulated Deficit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(158,380
|
)
|
|
(158,380
|
)
|
December
31, 2005
|
|
|
2,000
|
|
|
-
|
|
|
20
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(158,380
|
)
|
|
(158,360
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
Deficit June 30, 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(181,768
|
)
|
|
(181,768
|
)
|
June
30, 2006
|
|
|
2,000
|
|
|
-
|
|
|
20
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(181,768
|
)
|
|
(340,128
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See
accompanying auditors' report and notes to the financial
statements.
BOND
LABORATORIES, INC.
STATEMENT
OF CASH FLOWS
Development
Stage Company
FOR
THE SIX MONTHS ENDED JUNE 30, 2006
|
|
2006
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
Net
(loss)
|
|
$
|
(181,768
|
)
|
Adjustments
to reconcile net income to net cash
|
|
|
|
|
(used
in) operating activities:
|
|
|
|
|
Depreciation
and amortization
|
|
|
1,101
|
|
Changes
in assets and liabilities:
|
|
|
|
|
Accrued
Liabilities
|
|
|
75,000
|
|
Accounts
payable
|
|
|
(4,081
|
)
|
Net
cash (used in) operating activities
|
|
|
(109,747
|
)
|
|
|
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
Purchase
of Intangible Asset
|
|
|
(5,426
|
)
|
Net
cash (used in) provided by investing activities
|
|
|
(5,426
|
)
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
Purchase
of Common Stock
|
|
|
20
|
|
Loans
from Affiliates
|
|
|
163,121
|
|
Net
cash provided by financing activities
|
|
|
163,141
|
|
|
|
|
|
|
INCREASE
IN CASH
|
|
|
47,968
|
|
CASH,
BEGINNING OF YEAR
|
|
|
35,309
|
|
CASH,
END OF YEAR
|
|
$
|
83,278
|
|
|
|
|
|
|
See
accompanying auditors' report and notes to the financial
statements.
BOND
LABORATORIES, INC.
Development
Stage Company
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE THREE AND SIX MONTHS ENDED JUNE 30, 2006
1.
DESCRIPTION OF BUSINESS
Bond
Laboratories, Inc. (“The Company”) was incorporated in the state of Nevada on
July 26, 2005. The Company is a development stage company. The company has
not
begun the process of operating this business and is still in the process of
research the best formula for market production. Bond Laboratories is building
a
turn-key Nutraceutical Dietary Supplement business catering to all five of
the
distribution segments focusing on the three major categories of the industry;
Energy, Pain Relief and Weight loss, utilizing a state of the art, alternative
delivery method vs. antiquated capsules and pills.
2.
BASIS
OF PRESENTATION
The
accompanying financial statements represent the financial position and results
of operations of the Company and includes the accounts and results of operations
of the Company. The accompanying financial statements include only the active
entity of the Company from the three and six months ended June 30,
2006.
3.
GOING
CONCERN ISSUES
Management
cannot provide any assurances that they will be able to secure sufficient funds
to satisfy the cash requirements for the next 12 months. The inability to secure
additional funds would have a material adverse effect on the
Company.
These
financial statements are presented on the basis that the Company will continue
as a going concern. Other than the previously disclosed impairments, no
adjustments have been made to these financial statements to give effect to
valuation adjustments that may be necessary in the event the Company is not
able
to continue as a going concern. The effect of those adjustments, if any, could
be substantial.
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The
financial statements have been prepared in accordance with accounting principles
generally accepted in the United States ("U.S. GAAP"). A summary of the
Company's significant accounting policies follows:
(a)
Nature of Business
The
Company was incorporated in Nevada on July 26, 2005 and is a development stage
company. The company is in the process of research and development of a new
energy drink product.
The
preparation of financial statements in conformity with U.S. GAAP requires
management to make estimates and assumptions that affect assets and liabilities
at the date of the financial statements and the reported amounts of revenues
and
expenses during the reporting periods. Actual results could differ from those
estimates.
The
primary management estimates included in these financial statements are the
impairment reserves applied to various long-lived assets and the fair value
of
its stock tendered in various non-monetary transactions.
(c)
Property and Equipment
Property
and equipment were recorded at cost less impairment and accumulated
depreciation. Depreciation was recorded using the straight-line or
units-of-production methods at the following rates:
Asset
Category
|
|
Depreciation/
Amortization Period
|
|
Furniture
and Fixture
|
|
|
3
Years
|
|
Office
equipment
|
|
|
3
Years
|
|
Leasehold
improvements
|
|
|
5
Years
|
|
Management
periodically assesses its ability to recover the cost of its long-lived assets
in accordance with the provisions of SFAS 144. Costs deemed not recoverable
are
charged to operations and the asset cost reduced by the estimated
impairment.
(d)
|
Cash
and Cash Equivalents
|
Cash
includes all short-term highly liquid investments that are readily convertible
to known amounts of cash and have original maturities of three months or less.
Cash balances are insured by the F.D.I.C. up to $100,000 per institution.
(e)
|
Fair
Value of Financial Instruments
|
The
financial instruments disclosed elsewhere in these notes are deemed to be
representative of their fair values, as the interest rates approximate market
rates giving consideration to their respective risks.
The
Company has applied certain assumptions in estimating these fair values. The
use
of different assumptions or methodologies may have a material effect on the
estimates of fair values.
(f)
Income
Taxes
- The
Company provides for income taxes based on the provisions of Statement of
Financial Accounting Standards No. 109,
Accounting for Income Taxes,
which,
among other things, requires that recognition of deferred income taxes be
measured by the provisions of enacted tax laws in effect at the date of
financial statements.
(g)
Net Loss Per Share
is
calculated using the weighted average number of shares of common stock
outstanding during the year. The Company has adopted the provisions of SFAS
No.
128
Earnings
Per Share
.
(h)
Stock-Based Compensation
-
Statements of Financial Accounting Standards No. 123,
Accounting
for Stock-Based Compensation
,
(“SFAS
123”) established accounting and disclosure requirements using a fair-value
based method of accounting for stock-based employee compensation. In accordance
with SFAS 123, the Company has elected to continue accounting for stock based
compensation using the intrinsic value method prescribed by Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees."
The
Company accounts for stock awards issued to nonemployees in accordance with
the
provisions of SFAS 123 and Emerging Issues Task Force (“EITF”) Issue No. 96-18
Accounting
for Equity Instruments that are Issued to Other Than Employees for Acquiring,
or
in Conjunction with Selling Goods or Services
.
Under
SFAS 123 and EITF 96-18, stock awards to nonemployees are accounted for at
their
fair value as determined under Black-Scholes option pricing model.
(i)
Intangible Assets
The
Company adopted Statement of Financial Accounting Standard (“SFAS”) No. 142,
Goodwill
and Other Intangible Assets
,
effective July 1, 2002. As a result, the Company discontinued amortization
of
goodwill, and instead annually evaluates the carrying value of goodwill for
impairment, in accordance with the provisions of SFAS No. 142.
Research
and Development
costs
are expensed as incurred.
Impairment
of Long-Lived Assets
is
assessed by the Company for impairment whenever there is an indication that
the
carrying amount of the asset may not be recoverable. Recoverability of these
assets is determined by comparing the forecasted undiscounted cash flows
generated by those assets to the assets’ net carrying value. The amount of
impairment loss, if any, is measured as the difference between the net book
value of the assets and the estimated fair value of the related
assets.
Recently
Issued Accounting Pronouncements
:
In
December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based
Compensation - Transaction and Disclosure, which provides alternative methods
of
transition for a voluntary change to fair value, based method of accounting
for
stock-based employee compensation as prescribed in SFAS 123, Accounting for
Stock-Based Compensation. Additionally, SFAS No. 148 requires more prominent
and
more frequent disclosures in financial statements about the effects of
stock-based compensation. The provisions of this statement are effective for
fiscal years ending after December 15, 2002, with early application permitted
in
certain circumstances. The Company presently does not intend to adopt the fair
value based method of accounting for its stock based compensation.
In
June
2003 the FASB issued Statement No. 150, “Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity” SFAS No. 150
requires certain instruments, including mandatory redeemable shares, to be
classified as liabilities, not as part of shareholders' equity or redeemable
equity. For instruments that are entered into or modified after May 31, 2003,
SFAS No. 150 is effective immediately upon entering the transaction or modifying
the terms. For other instruments covered by Statement 150 that were entered
into
before June 1, 2003, Statement 150 is effective for the first interim period
beginning after June 15, 2003. The Company has evaluated the provisions of
SFAS
No. 150 and implementation of such was not material.
In
November 2002, the FASB issued Interpretation No. 45 ("FIN 45"), Guarantor's
Accounting and Disclosure Requirements for Guarantees, including Indirect
Guarantees of Indebtedness of Others. FIN 45 requires a company, at the time
it
issues a guarantee, to recognize an initial liability for the fair value of
obligations assumed under the guarantees and elaborates on existing disclosure
requirements related to guarantees and warranties. The initial recognition
requirements are effective for the Company during the third quarter ending
March
31, 2003. The adoption of FIN 45 did not have an impact on the Company’s
financial position or results of operations.
In
January 2003, the FASB issued FASB Interpretation No. 46 ("FIN 46"),
Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51.
FIN 46 requires certain variable interest entities to be consolidated by the
primary beneficiary of the entity if the equity investors in the entity do
not
have the characteristics of a controlling financial interest or do not have
sufficient equity at risk for the entity to finance its activities without
additional subordinated financial support from other parties. FIN 46 is
effective for all new variable interest entities created or acquired after
January 31, 2003. For variable interest entities created or acquired prior
to
February 1, 2003, the provisions of FIN 46 must be applied for the first interim
or annual period beginning after June 15, 2003. The adoption of FIN 46 did
not
have an impact on the Company’s financial position or results of
operations.
5.
NOTES
PAYABLE
Notes
payable at June 30, 2006 comprise the following:
Convertible
note payable to individual. The note bears interest at 6% per annum
and is
payable at the time of conversion. The note is convertible to common
stock
at $50% of the initial public offering.
|
|
$
|
168,424
|
|
|
|
|
|
|
Note
payable to Small World Traders. Is a revolving loan commitment up
to
$250,000 and is due and payable on December 31.2006. Collateralized
by all
the assets of the company. Original principal balance of $60,000.
The note
bears interest at 8% per annum and requires no monthly principal
and
interest payments. The company has accrued all interest due through
June
30, 2006.
|
|
|
111,211
|
|
|
|
|
|
|
Totals
|
|
$
|
279,635
|
|
6.
PROPERTY AND EQUIPMENT
The
Company has no fixed assets as of June 30, 2006. The Company has two intangible
assets as follows:
Logos
|
|
|
4,307
|
|
Website
|
|
|
8,043
|
|
|
|
|
|
|
Accumulated
Amortization
|
|
|
(1,101
|
)
|
|
|
|
|
|
Net
Intangible Assets
|
|
|
11,249
|
|
7.
SHARE
CAPITAL
On
July
26, 2005, the Company authorized 2,000 shares of common stock, at $.01 par
value
and 2000 shares were issued to its shareholder. The company issued 4,998,000
in
Common Stock and 5,000,000 in preferred stock as of August 31, 2006.
8.
INCOME
TAXES
The
Company recognizes deferred income taxes for the differences between financial
accounting and tax bases of assets and liabilities. Income taxes for the six
months ended June 30, 2006 consisted of the following:
|
|
2005
|
|
Current
tax (benefit) provision
|
|
$
|
(72,700
|
)
|
Deferred
tax (benefit) provision
|
|
|
72,700
|
|
Total
income tax provision
|
|
$
|
-
0 -
|
|
Net
deferred tax assets of $72,700 were fully offset by an equal valuation allowance
at June 30, 2006. The deferred income tax assets relate primarily to net
operating loss carryforwards and differences in book and tax bases of property
and equipment, intangible assets and certain accruals.
9.
COMMITMENTS AND CONTINGENCIES
The
Company has entered into various consulting agreements with outside consultants.
However, certain of these agreements included additional compensation on the
basis of performance. The consulting agreement are with key shareholders that
are instrumental to the success of the company and its development of it
product.
10.
RELATED PARTY TRANSACTIONS
Bond
is
managed by its key shareholder and as of June 30, 2006 its sole shareholder,
officer and director. This shareholder is the sole shareholder of Small World
Traders.
11.
NET
LOSS PER SHARE
Restricted
shares and warrants are not included in the computation of the weighted average
number of shares outstanding during the periods. There are no restricted shares
or warrants issued in the Capital of Bond and subsidiaries. The net loss per
common share is calculated by dividing the consolidated loss by the weighted
average number of shares outstanding during the periods.
12.
Recent Accounting Pronouncements
In
May
2005, the FASB issued SFAS No. 154, “Accounting Changes and Error
Corrections.” This statement replaces APB Opinion No. 20, “Accounting
Changes”, and SFAS No. 3, “Reporting Accounting Changes in Interim
Financial Statements,” and changes the requirements for the accounting for and
reporting of a change in accounting principle. This statement applies to all
voluntary changes in accounting principles. It also applies to changes required
by an accounting pronouncement in the unusual instance that the pronouncement
does not include specific transition provisions. When a pronouncement includes
specific transition provisions, those provisions should be followed. SFAS
No. 154 requires retrospective application to prior periods’ financial
statements of voluntary changes in accounting principles. SFAS No. 154 is
effective for accounting changes and corrections of errors made during 2007,
beginning on January 1, 2007. Bond does not believe the adoption of SFAS
No. 154 will have a material impact on its financial
statements.
In
December 2004, the FASB issued SFAS No. 123 (revised 2004), “Share—Based
Payment” (“SFAS No. 123(R)”). This statement is a revision of SFAS
No. 123, “Accounting for Stock—Based Compensation,” and supersedes APB
Opinion No. 25, “Accounting for Stock Issued to Employees,” and its related
implementation guidance. In March 2005, the Securities and Exchange Commission
(“SEC”) issued Staff Accounting Bulletin (“SAB”) No. 107, which expresses
the staff’s views on interactions between SFAS No. 123(R) and certain SEC
rules and regulations and provides interpretations of the valuation of
share-based payments for public companies. SFAS No. 123(R) will require
Bond to measure all stock-based compensation awards using a fair value method
and record such expense in its consolidated financial statements. In addition,
the adoption of SFAS No. 123(R) will require additional accounting related
to the income tax effects and additional disclosure regarding the cash flow
effects resulting from share-based payment arrangements. In April 2005, the
SEC
extended the effective date for SFAS No. 123(R), and the statement is
effective as of January 1, 2006 for Bond.
The
effects of the adoption of SFAS No. 123(R) on Bond’s results of operations
and financial position are dependent upon a number of factors, including the
number of employee stock options outstanding and unvested, the number of
stock-based awards which may be granted in the future, the life and vesting
features of stock-based awards which may be granted in the future, the future
market value and volatility of Bond’s stock, movements in the risk free rate of
interest, award exercise and forfeiture patterns, and the valuation model used
to estimate the fair value of each award. Bond is currently evaluating these
variables in the design of its stock-based compensation program as well as
the
accounting requirements under SFAS No. 123(R) and SAB No. 107. In
addition, Bond intends to utilize restricted stock units as a key component
of
its ongoing employee stock-based compensation plan. These awards generally
are
recognized at their fair value, equal to the quoted market price of Bond’s
common stock on the date of issuance, and this amount is amortized over the
vesting period of the shares of restricted stock held by the grantee. Bond
believes that the adoption of SFAS No. 123(R) will have a material impact
on its financial statements.
In
December 2004, the FASB issued FASB Staff Position (“FSP”) No. FAS 109-2,
“Accounting and Disclosure Guidance for the Foreign Earnings Repatriation
Provision within the American Jobs Creation Act of 2004.” The American Jobs
Creation Act (“AJCA”) introduces a special one-time dividends received deduction
on the repatriation of certain foreign earnings to a U.S. taxpayer
(“repatriation provision”), provided certain criteria are met. FSP FAS 109-2
provides accounting and disclosure guidance for the repatriation provision.
Bond
completed its evaluation of this FSP and decided not to repatriate foreign
earnings under these provisions as it would not be beneficial to
Bond.
In
December 2004, the FASB issued SFAS No. 153, “Exchanges of Nonmonetary
Assets, an amendment of APB Opinion No. 29.” The amendments made by SFAS
No. 153 eliminate the exception for nonmonetary exchanges of similar
productive assets and replace it with a general exception for exchanges of
nonmonetary assets that do not have commercial substance. A nonmonetary exchange
has commercial substance if the future cash flows of the entity are expected
to
change significantly as a result of the exchange. The provisions of this
statement became effective for nonmonetary asset exchanges occurring in Bond’s
fourth quarter of 2005. The adoption of SFAS No. 153 did not have a
material impact on Bond’s financial statements.
In
November 2004, the FASB issued SFAS No. 151, “Inventory Costs—an
Amendment of ARB No. 43, Chapter 4.” SFAS No. 151 amends
Accounting Research Bulletin (“ARB”) No. 43, Chapter 4, to clarify
that abnormal amounts of idle facility expense, freight, handling costs, and
wasted materials (spoilage) should be recognized as current-period charges.
In addition, this statement requires that allocation of fixed production
overheads to the costs of conversion be based on the normal capacity of the
production facilities. The provisions of this statement are effective for
inventory costs incurred beginning in Bond’s first quarter of 2006. Bond does
not believe that the adoption of SFAS No. 151 will have a material impact
on its financial statements.
14.
SUBSEQUENT EVENTS
The
company’s management consisted of Scott Landow CEO. The company has changed its
capitalization and issued additional 5,000,000 common shares and 5,000,000
preferred shares to related entities and individuals that are key to the success
to this development stage company.
PART
II — INFORMATION NOT REQUIRED IN PROSPECTUS
Neither
our Articles of Incorporation nor Bylaws prevent us from indemnifying our
officers, directors and agents to the extent permitted under the Nevada Revised
Statute (“NRS”). NRS Section 78.502, provides that a corporation shall
indemnify any director, officer, employee or agent of a corporation against
expenses, including attorneys’ fees, actually and reasonably incurred by him in
connection with any the defense to the extent that a director, officer, employee
or agent of a corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to Section 78.502(1) or
78.502(2), or in defense of any claim, issue or matter therein.
NRS
78.502(1) provides that a corporation may indemnify any person who was or is
a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or
investigative, except an action by or in the right of the corporation, by reason
of the fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses, including attorneys’ fees,
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with the action, suit or proceeding if he: (a) is not
liable pursuant to NRS 78.138; or (b) acted in good faith and in a manner
which he reasonably believed to be in or not opposed to the best interests
of
the corporation, and, with respect to any criminal action or proceeding, had
no
reasonable cause to believe his conduct was unlawful.
NRS
Section 78.502(2) provides that a corporation may indemnify any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action or suit by or in the right of the corporation to procure
a
judgment in its favor by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses, including amounts paid in settlement and attorneys’ fees actually and
reasonably incurred by him in connection with the defense or settlement of
the
action or suit if he: (a) is not liable pursuant to NRS 78.138; or
(b) acted in good faith and in a manner which he reasonably believed to be
in or not opposed to the best interests of the corporation. Indemnification
may
not be made for any claim, issue or matter as to which such a person has been
adjudged by a court of competent jurisdiction, after exhaustion of all appeals
there from, to be liable to the corporation or for amounts paid in settlement
to
the corporation, unless and only to the extent that the court in which the
action or suit was brought or other court of competent jurisdiction determines
upon application that in view of all the circumstances of the case, the person
is fairly and reasonably entitled to indemnity for such expenses as the court
deems proper.
NRS
Section 78.747 provides that except as otherwise provided by specific
statute, no director or officer of a corporation is individually liable for
a
debt or liability of the corporation, unless the director or officer acts as
the
alter ego of the corporation. The question of whether a director or officer
acts as the alter ego of a corporation must be determined by the court as a
matter of law.
No
pending material litigation or proceeding involving our directors, executive
officers, employees or other agents as to which indemnification is being sought
exists, and we are not aware of any pending or threatened material litigation
that may result in claims for indemnification by any of our directors or
executive officers.
Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers or persons controlling us pursuant to the
foregoing provisions, we have been informed that, in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Securities Act and is therefore unenforceable. In
the
event that a claim for indemnification against such liabilities (other than
the
payment by the registrant of expenses incurred or paid by a director, officer
or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, we will, unless
in
the opinion of our counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by us is against public policy as expressed hereby in the
Securities Act and we will be governed by the final adjudication of such issue.
Item 25.
Other
Expenses of Issuance and Distribution*
The
following table sets forth the estimated costs and expenses we will pay in
connection with the offering described in this registration statement.
Securities
and Exchange Commission
R
egistration
fee
|
|
|
*
|
|
Engraving
expenses
|
|
|
*
|
|
Accounting
fees and expenses
|
|
|
*
|
|
Legal
fees
and
expenses
|
|
|
*
|
|
Blue
sky fees
and
expenses
|
|
|
*
|
|
Printing
and
costs
|
|
|
*
|
|
Miscellaneous
|
|
|
*
|
|
Total
|
|
$
|
*
|
|
|
|
|
|
|
*To
be
filed by amendment.
Sales
of Unregistered Securities.
From
May,
2005 through August 14, 2006, the Company issued 5,000,000 shares of common
stock and 5,000,000 shares of its preferred stock to its founders in return.
The
offer and sale of such shares of our common stock were effected in reliance
on
the exemptions for sales of securities not involving a public offering, as
set
forth in Rule 506 promulgated under the Securities Act and in Section 4(2)
of the Securities Act, based on the following: (a) the investors confirmed
to us that they were “accredited investors,” as defined in Rule 501 of
Regulation D promulgated under the Securities Act and had such background,
education and experience in financial and business matters as to be able to
evaluate the merits and risks of an investment in the securities; (b) there
was no public offering or general solicitation with respect to the offering;
(c) the investors were provided with certain disclosure materials and all
other information requested with respect to our company; (d) the investors
acknowledged that all securities being purchased were “restricted securities”
for purposes of the Securities Act, and agreed to transfer such securities
only
in a transaction registered under the Securities Act or exempt from registration
under the Securities Act; and (e) a legend was placed on the certificates
representing each such security stating that it was restricted and could only
be
transferred if subsequent registered under the Securities Act or transferred
in
a transaction exempt from registration under the Securities Act.
Between
September 2005 and August, 2006, the Company issued $290,000 in two year secured
convertible notes, convertible into shares of the Company’s common stock at
$1.00 per share. The offer and sale of such shares of our common stock were
effected in reliance on the exemptions for sales of securities not involving
a
public offering, as set forth in Rule 506 promulgated under the Securities
Act
and in Section 4(2) of the Securities Act, based on the following:
(a) the investors confirmed to us that they were “accredited investors,” as
defined in Rule 501 of Regulation D promulgated under the Securities Act and
had
such background, education and experience in financial and business matters
as
to be able to evaluate the merits and risks of an investment in the securities;
(b) there was no public offering or general solicitation with respect to
the offering; (c) the investors were provided with certain disclosure
materials and all other information requested with respect to our company;
(d) the investors acknowledged that all securities being purchased were
“restricted securities” for purposes of the Securities Act, and agreed to
transfer such securities only in a transaction registered under the Securities
Act or exempt from registration under the Securities Act; and (e) a legend
was placed on the certificates representing each such security stating that
it
was restricted and could only be transferred if subsequent registered under
the
Securities Act or transferred in a transaction exempt from registration under
the Securities Act.
Undertakings
The
undersigned registrant hereby undertakes:
(a)
Insofar as indemnification for liabilities arising under the Securities Act
of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described above, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that
a
claim for indemnification against such liabilities (other than the payment
by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
(b)
The
undersigned registrant hereby undertakes:
(1)
To
file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement;
(2)
To
include any prospectus required by section 10(a)(3) of the Securities Act of
1933;
(3)
To
reflect in the prospectus any facts or events arising after the effective date
of the Registration Statement (or the most recent post-effective amendment
thereof) which, individually, or in the aggregate, represent a fundamental
change in the information set forth in the Registration Statement;
notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the “Calculation of Registration Fee”
table in the effective Registration Statement; and
(4)
To
include any material information with respect to the plan of distribution not
previously disclosed in the Registration Statement or any material change to
such information in the Registration Statement
(i)
That,
for the purpose of determining any liability under the Securities Act of 1933,
each post-effective amendment shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof;
and
(ii)
To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
Offering.
(c)
The
undersigned registrant hereby undertakes that, for purposes of determining
any
liability under the Securities Act, each filing of the registrant’s annual
report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan’s annual report pursuant to Section 15(d) of the Securities Exchange
Act of 1934) that is incorporated by reference in the Registration Statement
shall be deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
Signatures
In
accordance with the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of
the
requirements of filing on Form SB-2 and authorized this registration statement
to be signed on its behalf by the undersigned, on the 25
th
day of
September 2006.
|
|
|
|
|
|
|
|
|
By:
|
/S/ Scott
Landow
|
|
Scott
Landow
|
|
CEO,
Director
|
|
|
|
|
|
|
|
|
|
By:
|
/S/ Scott
Landow
|
|
Scott
Landow
|
|
Principal
Financial
Officer.
|
In
accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities
and
on the dates stated:
|
|
|
|
|
Signatures
|
|
Title
|
|
Date
|
|
|
|
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S
Scott Landow
Scott
Landow
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Chief
Executive Officer, Director, Principal
Financial
Officer
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September
25, 2006
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Exhibit
Index
The
following Exhibits are filed as part of this Registration Statement pursuant
to
Item 601 of Regulation S-B:
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3.1
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Articles
of Incorporation*
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3.1
(b)
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Amendment
to the Articles of Incorporation*
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3.2
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Bylaws*
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4.1
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Form
of Common Stock Certificate
*
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5.1
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Opinion
of Joseph Emas, Attorney at Law*
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10.1
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Form
of Employment Agreement between Bond Laboratories, Inc. and Scott
Landow.*
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10.2
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Form
of Warrant*
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23.1
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Consent
of Joseph Emas, Attorney at Law (see 5.1 opinion)*
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23.2
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Consent
of Independent Registered Public Accounting Firm*
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99.1
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Securities
Purchase Agreement*
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*
filed
herein
BYLAWS
OF
BOND
LABORATORIES, INC.
ARTICLE
I
OFFICES
1.1
REGISTERED OFFICE. The registered office of the Corporation required by the
General Corporation Law of Nevada, Nevada Revised Statutes, 1957 ("
NRS
"),
Chapter 78, to be maintained in Nevada may be, but need not be, identical with
the principal office if in Nevada, and the address of the registered office
may
be changed from time to time by the Board of Directors.
1.2
PRINCIPAL OFFICE. The Corporation may have such other office or offices either
within or outside of the State of Nevada as the business of the Corporation
may
require from time to time if so designated by the Board of Directors.
ARTICLE
II
STOCKHOLDERS
2.1
ANNUAL
MEETING. During such time as the Corporation is subject to Section 2115 of
the
California General Corporations Law (the “
Quasi-California
Corporation Law
”),
an
annual meeting of the stockholders shall be held in accordance with Section
600
of the California General Corporations Law at such date, time, and place, either
within or without the State of Nevada, as the Board of Directors shall fix.
At
such time as the Corporation is not subject to the Quasi-California Corporation
Law, then unless otherwise designated by the Board of Directors, an annual
meeting of stockholders shall be held on the date and at the time and place
fixed by the Board of Directors; provided, however, that each annual meeting
shall be held on a date that is within 18 months after the preceding annual
meeting.
2.2
SPECIAL
MEETINGS. Special meetings of stockholders of the Corporation, for any purpose,
may be called by the Chairman of the Board, the president, any vice president,
any two members of the Board of Directors, or the holders of at least 10% of
all
the outstanding shares of the Corporation who desire to call a special meeting
pursuant to this Article shall notify the president that a special meeting
of
the stockholders shall be called. Within 30 days after notice to the president,
the president shall set the date, time, and location of a stockholders’ meeting.
The date set by the president shall be not less than 30 nor more than 120 days
after the date of notice to the president. If the president fails to set the
date, time, and location of special meeting within the 30-day time period
described above, the stockholder or stockholders calling the meeting shall
set
the date, time, and location of the special meeting. At a special meeting no
business shall be transacted and no corporate action shall be taken other than
that stated in the notice of the meeting.
2.3
PLACE
OF
MEETING. The Board of Directors may designate any place, either within or
outside the State of Nevada, as the place for any annual meeting or special
meeting called by the Board of Directors. If no designation is made, or if
a
meeting shall be called otherwise than by the Board, the place of meeting shall
be the Company’s principal offices, whether within or outside the State of
Nevada.
2.4
NOTICE
OF
MEETING. Written notice signed by an officer of the Corporation or a person
designated by the Board of Directors, stating the place, day, and hour of the
meeting and the purpose for which the meeting is called, shall be delivered
personally or mailed postage prepaid to each stockholder of record entitled
to
vote at the meeting not less than 10 nor more than 60 days before the meeting.
If mailed, such notice shall be directed to the stockholder at the address
as it
appears upon the records of the Corporation, and notice shall be deemed to
have
been given upon the mailing of any such notice, and the time of the notice
shall
begin to run from the date upon which the notice is deposited in the mail for
transmission to the stockholder. Personal delivery of any such notice to any
officer of a corporation or association, or to any member of a partnership,
constitutes delivery of the notice of any meeting by a writing signed by him
or
his duly authorized attorney, either before or after the meeting.
2.5
ADJOURNMENT.
When a meeting is for any reason adjourned to another time or place, notice
need
not be given of the adjourned meeting if the time and place thereof are
announced at the meeting at which the adjournment is taken. At the adjourned
meeting, any business may be transacted which might have been transacted at
the
original meeting.
2.6
ORGANIZATION.
The president or vice president shall call meetings of stockholders to order
and
act as chairman of such meetings. In the absence of said officers, any
stockholder entitled to vote at that meeting, or any proxy of any such
stockholder, may call the meeting to order and a chairman shall be elected
by a
majority of the stockholders entitled to vote at that meeting. In the absence
of
the secretary or any assistant secretary of the Corporation, any person
appointed by the chairman shall act as secretary of such meeting. An appropriate
number of inspectors for any meeting of stockholders may be appointed by the
chairman of such meeting. Inspectors so appointed will open and close the polls,
will receive and take charge of proxies and ballots, and will decide all
questions as to the qualifications of voters, validity of proxies and ballots,
and the number of votes properly cast.
2.7
CLOSING
OF TRANSFER BOOKS OR FIXING OF RECORD DATE. The directors may prescribe a period
not exceeding 60 days before any meeting of the stockholders during which no
transfer of stock on the books of the Corporation may be made, or may fix a
day
not more than 60 days before the holding of any such meeting as the day as
of
which stockholders entitled to notice of and to vote at such meetings must
be
determined. Only stockholders of record on that day are entitled to notice
or to
vote at such meeting.
2.8
QUORUM.
Unless otherwise provided by the Articles of Incorporation, a majority of the
outstanding shares of the Corporation entitled to vote, represented in person
or
by proxy, shall constitute a quorum at a meeting of stockholders. If fewer
than
a majority of the outstanding shares are represented at a meeting, a majority
of
the shares so represented may adjourn the meeting without further notice for
a
period not to exceed 60 days at any one adjournment. At such adjourned meeting
at which a quorum shall be present or represented, any business may by
transacted which might have been transacted at the meeting as originally
notified. The stockholders present at a duly organized meeting may continue
to
transact business until adjournment, notwithstanding the withdrawal of
stockholders so that less than a quorum remains.
If
a
quorum is present, the affirmative vote of a majority of the shares represented
at the meeting and entitled to vote on the subject matter shall be the act
of
the stockholders, unless the vote of a greater number or voting by classes
is
required by law or the Articles of Incorporation.
2.9
PROXIES.
At all meeting of stockholders, a stockholder may vote by proxy, as prescribed
by law. Such proxy shall be filed with the secretary of the Corporation before
or at the time of the meeting. No proxy shall be valid after 6 months from
the
date of its creation, unless it is coupled with an interest, or unless the
stockholder specifies in it the length of time for which it is to continue
in
force, which may not exceed 7 years from the date of its creation.
2.10
VOTING
OF
SHARES. Each outstanding share, regardless of class, shall be entitled to one
vote, and each fractional share shall be entitled to a corresponding fractional
vote on each matter submitted to a vote at a meting of stockholders, except
as
may be otherwise provided in the Articles of Incorporation or in the resolution
providing for the issuance of the stock adopted by the Board of Directors
pursuant to authority expressly vested in it by law or the provisions of the
Articles of Incorporation. If the Articles of Incorporation or any such
resolution provide for more or less than one vote per share for any class or
series of shares on any matter, every reference in the Articles of
Incorporation, these Bylaws and the General Corporation Law of Nevada to a
majority or other proportion or number of shares shall be deemed to refer to
a
majority or other proportion of the voting power of all of the shares or those
classes or series of shares, as may be required by the Articles of
Incorporation, or in the resolution providing for the issuance of the stock
adopted by the Board of Directors pursuant to authority expressly vested in
it
by the Articles of Incorporation, or the General Corporation Law of Nevada.
Cumulative voting shall not be allowed. Unless the General Corporation Law
of
Nevada, the Articles of Incorporation, or these Bylaws provide for different
proportions, an act of stockholders who hold at least a majority of the voting
power and are present at a meeting at which a quorum is present is the act
of
the stockholders.
2.11
ACTION
TAKEN WITHOUT A MEETING. Unless otherwise provided in the Articles of
Incorporation or these Bylaws, any action required or permitted to be taken
at a
meeting of the stockholders may be taken without a meeting if a written consent
thereto is signed by stockholders holding at least a majority of the voting
power, except that if a different proportion of voting power is required for
such an action at a meeting, then that proportion of written consents is
required. In no instance where action is authorized by written consent need
a
meeting of stockholders be called or notice thereof given. The written consent
must be filed with the minutes of the proceedings of the stockholders.
2.12
MEETINGS
BY TELEPHONE. Unless otherwise restricted by the Articles of Incorporation
or
these Bylaws, stockholders may participate in a meeting of stockholders by
means
of a telephone conference or similar method of communication by which all
persons participating in the meeting can hear each other. Participation in
a
meeting pursuant to this Section constitutes presence in person at the
meeting.
ARTICLE
III
DIRECTORS
3.1
BOARD
OF
DIRECTORS; NUMBER; QUALIFICATIONS; ELECTION. The Corporation shall be managed
by
a Board of Directors, all of whom must be natural persons at least 18 years
of
age. Directors need not be residents of the State of Nevada or stockholders
of
the Corporation. The number of directors of the Corporation shall not be less
than one (1) nor more than nine (9). Subject to such limitations, the number
of
directors may be increased or decreased by resolution of the Board of Directors,
but no decrease shall have the effect of shortening the term of any incumbent
director. Subject to the Corporation’s Articles of Incorporation, each director
shall hold office until the next annual meeting of shareholders or until his
successor has been elected and qualified.
3.2
POWERS
OF
THE BOARD OF DIRECTORS: GENERALLY. Subject only to such limitations as may
be
provided by the General Corporation Law of Nevada or the Articles of
Incorporation, the Board of Directors shall have full control over the affairs
of the Corporation.
3.3
COMMITTEES
OF THE BOARD OF DIRECTORS. The Board of Directors may, be resolution or
resolutions passed by a majority of directors, designate one or more committees,
each committee to consist of one more directors, which, to the extent provided
in the resolution or resolutions or in these Bylaws, shall have and may exercise
the powers of the Board of Directors in the management of the business and
affairs of the Corporation, and may have power to authorize the seal of the
Corporation to be affixed to all papers on which the Corporation desires to
place on a seal. Such committee or committees shall have such name or names
as
may be determined from time to time by resolution adopted by the Board of
Directors. Unless the Articles of Incorporation or these Bylaws provide
otherwise, the Board of Directors may appoint natural persons who are not
directors to serve on committees.
3.4
RESIGNATION.
Any director of the Corporation may resign at any time by given written notice
of his resignation to the Board of Directors, the president, any vice president,
or the secretary of the Corporation. Such written notice of resignation shall
not be necessary to make it effective. When one or more directors shall resign
from the Board, a majority of the directors then in office, though less than
a
quorum, may appoint a successor to take office upon the effectiveness of a
director’s resignation. A director appointed due to the resignation of a
director shall hold office for the duration of the term of office of the
resigning director.
3.5
REMOVAL.
Except as otherwise provided in the Articles of Incorporation, any director
may
be removed, either with or without cause, at any time by the vote of the
stockholder representing not less than a majority of the voting power of the
issued and outstanding stock entitled to vote at an election of
directors.
3.6
VACANCIES.
All vacancies, including those caused by an increase in the number of directors,
may be filled by a majority of the remaining directors, though less than a
quorum, unless it is otherwise provided in the Articles of Incorporation. A
director elected to fill a vacancy shall be elected for the unexpired term
of
his/her predecessor in office. A director elected to fill a vacancy caused
by an
increase in the number of directors shall hold office until the next annual
meeting of stockholders and until his/her successor has been elected and has
qualified.
3.7
REGULAR
MEETINGS. A regular meeting of the Board of Directors shall be held without
other notice than this Bylaw immediately after and at the same place as the
annual meeting of stockholders. The Board of Directors may provide by resolution
the time and place, either within or outside the State of Nevada, for the
holding of additional regular meetings.
3.8
SPECIAL
MEETINGS. Special meetings of the Board of Directors may be called by or at
the
request of the president, secretary, treasurer, or any combination thereof,
or a
majority of the directors then in office. The person or persons who call a
special meeting of the Board of Directors may fix any place, either within
or
outside Nevada, as the place for holding any special meeting of the Board of
Directors called by them.
3.9
NOTICE.
Notice of any special meeting shall be given at least two days prior thereto
by
written notice delivered personally or mailed to each director at his/her
address(es). Any director may waive notice of any meeting. A director’s presence
at a meeting shall constitute a waiver of notice of such meeting if the
director’s oral consent is entered on the minutes or by taking part in the
deliberations at such meeting without objecting. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the Board
of Directors need be specified in the notice or waiver of notice of such
meeting.
3.10
QUORUM.
A
majority of the number of directors elected and qualified at the time of the
meeting shall constitute a quorum for the transaction of business at any such
meeting of the Board of Directors, but if less than a majority is present at
a
meeting, a majority of the directors present may adjourn the meeting without
further notice.
3.11
MANNER
OF
ACTING. If a quorum is present, the affirmative vote of a majority of the
directors present at the meeting and entitled to vote on that particular matter
shall be the act of the Board, unless the vote of a greater number is required
by law or the Articles of Incorporation.
3.12
COMPENSATION.
By resolution of the Board of Directors, any director may be compensated for
any
one or more the following: expenses, if any, of attendance at meetings; a fixed
sum for attendance at such meeting; or a stated salary as director. No such
payment shall preclude any director from serving the Corporation in any other
capacity and receiving compensation therefore.
3.13
ACTION
TAKEN WITHOUT A MEETING. Unless otherwise provided in the Articles of
Incorporation or these Bylaws, any action required or permitted to be taken
at a
meeting of the Board of Directors or a committee thereof may be taken without
a
meeting if, a written consent thereto is signed by all the members of the Board
or of the committee confirming the action(s) taken. The written consent must
be
filed with the minutes of the proceedings of the Board or committee.
3.14
MEETINGS
BY TELEPHONE. Unless otherwise restricted by the Articles of Incorporation
or
these Bylaws, members of the Board of Directors or of any committee designated
by the Board, may participate in a meeting of the Board or committee by means
of
a telephone conference or similar method of communication by which all persons
participating in the meeting can hear each other. Participation in a meeting
pursuant to this Section constitutes presence in person at the meeting.
ARTICLE
IV
OFFICERS
AND AGENTS
4.1
OFFICERS
OF THE CORPORATION. The Corporation shall have a president, secretary, and
a
treasurer, each of whom shall be elected by the Board of Directors. The Board
of
Directors may appoint one or more vice presidents and such other officers,
assistant officers, committees, and agents, including a chairman of the board,
assistant secretaries, and assistant treasurers, as they may consider necessary,
each of who shall be chosen in such manner and hold their office for such terms
and have such authority and duties as from time to time may be determined by
the
Board of Directors. One person may hold any two or more offices. The officers
of
the Corporation shall be natural persons 18 years of age or older. In all cases
where the duties of any officer, agent, or employee are not prescribed by the
Bylaws or by the Board of Directors, such officer, agent, or employee shall
follow the orders and instructions of (a) the president, and if a chairman
of
the board is elected, then (b) the chairman of the board.
4.2
ELECTION
AND TERM OF OFFICE. The officers of the Corporation shall be elected by the
Board of Directors annually at the first meeting of the Board held after each
annual meeting of the stockholders. If the election of officers shall not be
held at such meeting, such election shall be held as soon thereafter as may
be
convenient. Each officer shall hold office until the first of the following
occurs: until his/her successor shall have been duly elected and qualified;
his/her death; his/her resignation; or his/her removal, as hereinafter
provided.
4.3
REMOVAL.
All officers or agents may be removed by the Board of Directors or by the
executive committee, if any, whenever it is determined to be in the best
interests of the Corporation, but such removal shall be without prejudice to
the
contract rights, if any, of the person removed. Election or appointment of
an
officer or agent shall not of itself create contract rights.
4.4
VACANCIES.
A vacancy in any office, however occurring, may be filled by a majority of
the
Board of Directors for the unexpired portion of the term.
4.5
PRESIDENT.
The president shall, subject to the direction and supervision of the Board
of
Directors, and in the absence of a separately appointed person to the position,
be the chief executive officer of the Corporation, and shall have general and
active control of its affairs and business and general supervision of its
officers, agents, and employees. In the absence of direction by the Board of
Directors, the president shall attend in person or by substitute appointed
by
him/her, or shall execute, on behalf of the Corporation, written instruments
appointing a proxy or proxies to represent the Corporation, at all meetings
of
the stockholders of any other corporation in which the Corporation shall hold
any stock. The president may, on behalf of the Corporation, in person or by
substitute or by proxy, execute written waivers of notice and consents with
respect to any such meetings. At all such meetings and otherwise, the president,
in person or by substitute or by proxy as aforesaid, may vote the stock so
held
by the Corporation and may execute written consents and other instruments with
respect to such stock, subject however to the instructions, if any, of the
Board
of Directors. The president shall have custody of the treasurer’s bond, if
any.
4.6
VICE
PRESIDENTS. Vice presidents, if any, shall assist the president and shall
perform such duties as may be assigned to them by the president or by the Board
of Directors. In the absence of the president, the vice president designated
by
the Board of Directors or, if there is no such designation, the vice president
designated in writing by the president shall have the powers and perform the
duties of the president. If no such designation by the president is made made,
all vice presidents may exercise such powers and perform such duties.
4.7
SECRETARY.
The secretary shall perform the following: (a) keep the minutes of the
proceedings of the stockholders, executive committee, and the Board of
Directors; (b) see that all notices are duly given in accordance with the
provisions of these Bylaws or as required by law; (c) be custodian of the
corporate records and the seal of the Corporation and affix the seal to all
documents when authorized by the Board of Directors; (d) keep, at the
Corporation’s registered office or principal place of business within or outside
Nevada, a record containing the names and addresses of all stockholders and
the
number and class of shares held by each, unless such a record shall be kept
at
the office of the Corporation’s transfer agent or registrar; (e) sign with the
president or a vice president, certificates for shares of the Corporation,
the
issuance of which shall have been authorized by resolution of the Board of
Directors; (f) have general charge of the stock transfer books of the
Corporation, unless the Corporation has a transfer agent; and (g) in general,
perform all duties incident to the office of the secretary and such other duties
as from time to time may be assigned by the president or the Board of Directors.
Assistant secretaries, if any, shall have the same duties and powers, subject
to
supervision by the secretary.
4.8
TREASURER.
The treasurer shall, in the absence of a separately appointed person to the
position, be the principal financial officer of the Corporation and shall have
the care and custody of all funds, securities, evidence of indebtedness, and
other personal property of the Corporation, and shall deposit the same in
accordance with the instructions of the Board of Directors. The treasurer of
principal financial officer shall receive and give receipts in acquittances
for
monies paid in or on account of the Corporation, and shall pay out of the funds
on hand all bills, payrolls, and other just debts of the Corporation of whatever
nature upon maturity. The treasurer or principal financial officer shall perform
all other duties incident to the office of the treasurer and, upon request
of
the Board, shall make such reports to it as may be required at any time. The
treasurer or principal financial officer shall, if required by the Board, give
the Corporation a bond in such sums and with such sureties as shall be
satisfactory to the Board, conditioned upon the faithful performance of duties
and for the restoration to the Corporation of all books, papers, vouchers,
money
and other property of whatever kind in his/her possession or under his/her
control belonging to the Corporation. The treasurer or principal financial
officer shall have such other powers and perform such others duties as may
be
from time to time prescribed by the Board of Directors or the president. The
assistant treasurers, if any, shall have the same powers and duties, subject
to
the supervision of the treasurer.
The
treasurer shall, in the absence of a separately appointed person to the
position, also be the principal accounting officer of the Corporation. He/she
shall prescribe and maintain the methods and systems of accounting to be
followed, keep complete books and records of account, prepare and file all
local, state, and federal tax returns, prescribe and maintain an adequate system
of internal audit, and prepare and furnish to the president and the Board of
Directors statements of account showing the financial position of the
Corporation and the results of its operations.
4.9
SALARIES.
Officers of the Corporation shall be entitled to such salaries, moluments,
compensation, or reimbursement as shall be fixed or allowed from time to time
by
the Board of Directors.
4.10
BONDS.
If
the Board of Directors by resolution shall so require, any officer or agent
of
the Corporation shall give bond to the Corporation in such amount and with
which
surety as the Board of Directors may deem sufficient, conditioned upon the
faithful performance of that officer’s or agent’s duties and
offices.
ARTICLE
V
STOCK
5.1
CERTIFICATES.
The shares of stock shall be represented by consecutively numbered certificates
signed in the name of the Corporation by its president or a vice president
and
by the treasurer or an assistant treasurer or by the secretary or an assistant
secretary, and shall bear the seal of the Corporation. Whenever any certificate
is countersigned or otherwise authenticated by a transfer agent or transfer
clerk, and by a registrar, then a facsimile of the signatures of the officers
or
agents, the transfer agent or transfer clerk or the registrar of the Corporation
may be printed or lithographed upon the certificate in lieu of the actual
signatures. If the Corporation uses facsimile signatures of its officers and
agents on its stock certificates, it cannot act as the registrar of its own
stock, but its transfer agent and registrar may be identical if the institution
acting in those dual capacities countersigns or otherwise authenticates any
stock certificates in both capacities. In case any officer who has signed or
whose facsimile signature has been placed upon such certificate shall have
ceased to be such officer before such certificate is delivered by the
Corporation, the certificate or certificates may nevertheless be adopted by
the
Corporation and be issued and delivered as though the person or persons who
signed the certificates had not ceased to be an officer of the Corporation.
If
the Corporation is authorized to issue shares of more than one class or more
than one series of any class, each certificate shall set forth or shall state
that the Corporation will furnish to any stockholder upon request and without
charge a full statement of the designations, preferences, limitations, and
relative rights of the shares of each class authorized to be issued and, if
the
Corporation is authorized to issue any preferred or special class in any series,
the variations in the relative rights and preferences between the shares of
each
such series, so far as the same have been fixed and determined, and the
authority of the Board of Directors to fix and determine the relative rights
and
preferences of subsequent series.
Each
certificate representing shares shall state the following upon the face thereof:
the name of the state of the Corporation’s organization; the name of the person
to who issued; the number and class of shares and the designation of the series;
if any, which such certificate represents; the par value, if any, of each share
represented by such certificate. Certificates of stock shall be in such form
consistent with the law as shall be prescribed by the Board of Directors. No
certificate shall be issued until the shares represented thereby are fully
paid.
5.2
RECORD.
A
record shall be kept of the name of each stockholder represented by each
certificate for shares of the Corporation issued, the number of shares
represented by each such certificate, the date thereof issued and, in the case
of cancellation, the date of cancellation. The stockholder in whose name shares
of stock stand on the books of the Corporation shall be deemed the owner
thereof, and thus a holder of record of such shares of stock, for all purposes
as regards the Corporation.
5.3
CONSIDERATION
FOR SHARES. Shares shall be issued for such consideration, as shall be fixed
from time to time by the Board of Directors. That part of the surplus of the
Corporation which is transferred to stated capital upon the issuance of shares
as a share dividend shall be deemed the consideration for the issuance of such
dividend shares. Such consideration may consist, in whole or in part, of money,
promissory notes, other property, tangible or intangible, labor or services
actually performed for the Corporation, contracts for services to be performed
or other securities.
5.4
CANCELLATION
OF CERTIFICATES. All certificates surrendered to the Corporation for transfer
shall be cancelled and no new certificates shall be issued in lieu thereof
until
the former certificate for a like number of shares shall have been surrendered
and canceled, except as herein provided with respect to lost, stolen, or
destroyed certificates.
5.5
LOST
CERTIFICATES. In the case of the alleged loss, destruction, or mutilation of
a
certificate of stock, the Board of Directors may direct the issuance of a new
certificate in lieu thereof upon such terms and conditions in conformity with
law as it may prescribe. The Board of Directors may in its discretion require
a
bond, in such form and amount and with such surety as it may determine, before
issuing a new certificate.
5.6
TRANSFER
OF SHARES. Upon surrender to the Corporation or to a transfer agent of the
Corporation of a certificate of stock duly endorsed or accompanied by proper
evidence of succession, assignment, or authority to transfer, and such
documentary stamps as may be required by law, it shall be the duty of the
Corporation to issue a new certificate to the person entitled thereto, and
cancel the old certificate. Every such transfer of stock shall be entered on
the
stock book of the Corporation which shall be kept at its principal office or
by
its registrar duly appointed.
The
Corporation shall be entitled to treat a stockholder of the Corporation as
the
holder in fact thereof, and accordingly shall not be bound to recognize any
equitable or other claim to or interest in such share on the part of any other
person whether or not it shall have express or other notice thereof, except
as
may be required by the laws of Nevada.
5.7
TRANSFER
AGENTS, REGISTRARS, AND PAYING AGENTS. The Board may at its discretion appoint
one or more transfer agents, registrars, and agents for making payment upon
any
class of stock, bond, debenture, or other security of the Corporation. Such
agents and registrars may be located either within or outside Nevada. They
shall
have such rights and duties and shall be entitled to such consideration as
may
be agreed.
ARTICLE
VI
INDEMNIFICATION
OF OFFICERS AND DIRECTORS
6.1
INDEMNIFICATION;
ADVANCEMENT OF EXPENSES. To the fullest extend permitted by the laws of the
State of Nevada, as amended, the Corporation shall indemnify its directors
and
officers, including payment of expenses as they are incurred and in advance
of
the final disposition of any action, suit, or proceeding. Employees, agents,
and
other persons may be similarly indemnified by the Corporation, including
advancement of expenses, in such case or cases and to the extent set forth
in a
resolution or resolutions adopted by the Board of Directors. No amendment of
this Section shall have any effect on indemnification or advancement of expenses
relating to any event arising prior to the date of such amendment.
6.2
INSURANCE
AND OTHER FINANCIAL ARRANGEMENTS AGAINST LIABILITY OF DIRECTORS, OFFICERS,
EMPLOYEES, AND AGENTS. To the fullest extent permitted by the laws of the State
of Nevada (currently set forth in NRS 78.752), as the same now exists or may
hereafter be amended or supplemented, the Corporation may purchase and maintain
insurance and make other financial arrangements on behalf of any person who
is
or was a director, officer, employee, or agent of another corporation,
partnership, joint venture, trust, or other enterprise, for any liability
asserted against such person and liability and expense incurred by such person
in its capacity as a director, officer, employee, or agent, or arising out
of
such person’s status as such, whether or not the Corporation has the authority
to indemnify such person against such liability and expenses.
ARTICLE
VII
ACQUISITION
OF CONTROLLING INTEREST
7.1
ACQUISITION
OF CONTROLLING INTEREST. The provisions of the General Corporations Law of
Nevada pertaining to the acquisition of a controlling interest, as amended,
shall not apply to the Corporation.
ARTICLE
VIII
EXECUTIVE
OF INSTRUMENTS; LOANS, CHECKS AND ENDORSEMENTS; DEPOSITS; PROXIES
8.1
EXECUTIVE
OF INSTRUMENTS. The president shall have the power to execute and deliver on
behalf of and in the name of the Corporation any instrument requiring the
signature of an officer of the Corporation, except as otherwise provided in
these Bylaws or delegated by the Board of Directors to some other officer or
agent of the Corporation. Unless authorized to do so by these Bylaws or by
the
Board of Directors, no officer, agent, or employee shall have any power or
authority to bind the Corporation in any way, to pledge its credit, or to render
it liable pecuniarily for any purpose or in any amount.
8.2
LOANS.
The Corporation may lend money to, guarantee the obligations of, and otherwise
assist directors, officers, and employees of the Corporation, or directors
of
another corporation of which the Corporation owns a majority of the voting
stock, only upon compliance with the requirements of the General Corporation
Law
of Nevada.
No
loans
shall be contracted on behalf of the Corporation and no evidence of indebtedness
shall be issued in its name unless authorized by a resolution of the Board
of
Directors. Such authority may be general or specific in nature.
8.3
CHECKS
AND ENDORSEMENTS. All checks, drafts, or other orders for the payment of money,
obligations, notes, or other evidences of indebtedness, bills of lading,
warehouse receipts, trade acceptances, and other such instruments shall be
signed or endorsed by such officers or agents of the Corporation as shall from
time to time be determined by resolution of the Board of Directors.
8.4
DEPOSITS.
All funds of the Corporation not otherwise employed shall be deposited from
time
to time to the Corporation’s credit in such banks or other depositories as shall
from time to time be determined by resolution of the Board of Directors, which
resolution may specify the officers or agents of the Corporation who shall
have
the power, and the manner in which such power shall be exercised, to make such
deposits and to endorse, assign, and deliver for collection and deposit checks,
drafts, and other orders for the payment of money payable to the Corporation
or
its order.
8.5
PROXIES.
The Board of Directors may from time to time appoint one or more agents or
attorneys-in-fact of the Corporation, in the name and on behalf of the
Corporation, to cast the votes which the Corporation may be entitled to cast
as
the holder of stock or other securities in any other corporation, association,
or other entity any of whose stock or other securities may be held by the
Corporation, at meetings of the holders of the stock of such other corporation,
association, or other entity or to consent in writing, in the name of the
Corporation as such holder, to any action by such other corporation,
association, or other entity, and may instruct the person(s) so appointed as
to
the manner of casting such votes or giving such consent, and may execute or
cause to be executed in the name and on behalf of the Corporation, all such
written proxies or other instruments as deemed necessary or proper.
8.6
CONTRACTS.
The Board of Directors may authorize any officer or officers, agent or agents,
to enter into any contract or execute and deliver any instrument in the name
of
and on behalf of the Corporation, and such authority may be general or specific
in nature.
ARTICLE
IX
MISCELLANEOUS
9.1
WAIVERS
OF NOTICE. Whenever notice is required by the General Corporation Law of Nevada,
by the Articles of Incorporation, or these Bylaws, a waiver thereof in writing
signed by the person entitled to said notice, whether before, at, or after
the
time stated therein, or the appearance at such meeting in person or (in the
case
of a stockholders’ meeting) by proxy, shall be equivalent to such notice.
9.2
FISCAL
YEAR. The Board of Directors may, by resolution, adopt a fiscal year for the
Corporation.
9.3
AMENDMENT
OF BYLAWS. The provisions of these Bylaws may at any time, and from time to
time, be amended, supplemented or repealed by a majority of the Board of
Directors.
9.4
UNIFORMITY
OF INTERPRETATION AND SEVERABILITY. These Bylaws shall be so interpreted and
construed as to conform to the Articles of Incorporation and the laws of the
State of Nevada or of any other state in which conformity may become necessary
by reason of the qualifications of the Corporation to do business in such state,
and where conflict between these Bylaws, the Articles of Incorporation or the
laws of such a state shall arise, these Bylaws shall be considered to be
modified to the extent, but only to the extent, conformity shall require. If
any
provision hereof or the application thereof shall be deemed to be invalid by
reason of the foregoing sentence, such invalidity shall not affect the validity
of the remaining Bylaws without the invalid provision or the application
thereof, and the provisions of these Bylaws are declared to be severable.
9.5
WAIVER
OF
ANNUAL REPORTING REQUIRMENT. So long as there are fewer than one hundred (100)
holders of record of the Corporation's shares, the annual report to stockholders
referred to in Section 1501 of the California Corporations Code is expressly
dispensed with and waived, but nothing herein shall be interpreted as
prohibiting the officers of the Corporation from making available financial
statements as provided by Section 1501(c) through (e) of the California
Corporations Code. This Section 9.5 shall apply during such time as the
Corporation is subject to Quasi-California Corporation Law.
SECRETARY’S
CERTIFICATION
The
undersigned Secretary of Bond Laboratories, Inc. hereby certifies that the
foregoing Bylaws are the Bylaws of the Corporation adopted by the Board of
Directors as of the
______
day of
August 2006.
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By:
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Scott
D. Landow,
Secretary
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This
Agreement
is made
between
B
OND
L
ABORATORIES
,
I
NC
.,
a Nevada
corporation (“Employer”), and Scott D. Landow, an individual resident of the
State of California (“Employee”).
WITNESSETH:
W
HEREAS
,
Employer
and Employee desire to set forth the terms of Employee’s employment by
Employer;
N
OW
,
T
HEREFORE
,
in
consideration of the premises and the mutual covenants and agreements herein
set
forth, the parties hereto agree as follows:
1.
E
MPLOYMENT
.
Employer
hereby engages and employs Employee and Employee accepts such employment with
Employer, all on the terms set forth herein. Employee’s principal duties
initially shall be to serve as President and CEO with general responsibilities
to assist in strategic matters of Employer. During his or her employment
hereunder, Employee shall devote his or her best efforts and attention on a
semi
full-time basis to the performance of the duties required of Employee and shall
discharge his or her duties in accordance with the directions of the Board
of
Directors of Employer.
2.
C
ANCELLATION
OF
E
XISTING
C
ONTRACTS
.
Employer
and Employee agree that any existing employment, noncompetition, confidentiality
or change-in-control agreements will be cancelled upon the effectiveness of
this
Agreement.
3.
C
OMPENSATION
.
3.1
Cash
Compensation
.
As
partial compensation for his or her services hereunder, Employee:
(a)
shall
receive an annual base salary of Ten Thousand and No/100 ($10,000.00) Dollars
(U.S.), per month prorated for any partial year of employment and payable in
equal installments in accordance with Employer’s then-current payroll practices
and procedures and subject to all applicable taxes and
withholdings;
(b)
shall
receive reimbursement of ordinary and necessary travel and other expenses,
subject to Employer’s standard policies (including any required approvals) and
reimbursement for all cell phone and Internet access charges;
(c)
shall
be provided medical and dental coverage for Employee and his immediate family
by
Employer, either through an employee benefit plan or separate policy(s), with
Employer paying one hundred (100%) percent of all premiums on such coverages,;
and
(d)
shall
be eligible to participate in those (i) employee benefit plans, and (ii)
incentive compensation and equity-related programs, maintained by Employer,
the
latter being contingent upon recommendation of the Chairman of the Board of
Employer and approval by the Compensation Committee of Employer’s Board of
Directors;
provided,
however,
that any
such incentive compensation plan shall provide that, upon mutual pre-determined
performance goals being achieved, Employee shall receive an annual bonus in
cash
not less than fifty (50%) nor more than one hundred (100%) percent of Employee’s
then-current annual salary.
3.2
Equity
Compensation.
As
additional compensation for his or her services hereunder,
Employee:
(a)
Shall
be
granted on an annual basis non-qualified or incentive (as the parties may from
time-to-time determine) options to purchase shares of the voting capital stock
of Employer, in such amounts and at such exercise prices as may be determined
from time-to-time by the Compensation Committee of Employer’s Board of
Directors, and upon such terms as are set forth in the documentation to evidence
such grant;
provided,
however,
that
Employer hereby agrees, and such documentation shall provide, that such options
shall fully vest upon the sooner to occur of (i) the third anniversary of the
date of grant, or (ii) a Change of Control (as that term is defined in Exhibit
“B” attached hereto); and
4.
C
ONFIDENTIALITY
.
Employee
shall not disclose to third parties or use for his or her own or others’ benefit
any Proprietary Information of Employer or any of its subsidiaries of which
he
or she becomes informed during his or her employment, whether or not such
information or material is developed by him, except as might be required to
be
disclosed or used by him in order to perform the duties of his or her
employment. As used herein, the term “Proprietary Information” refers to any and
all information of a confidential, proprietary or secret nature which is or
may
be either applicable to or related in any way to (a) the business, present
or
future, of Employer or any of its subsidiaries, including without limitation
the
business of Employer, (b) the research and development or investigations of
Employer or any or its subsidiaries, or (c) the business of any customer of
Employer or any of its subsidiaries, and shall include, but not be limited
to,
trade secrets, processes, formulas, data, algorithms, source codes, object
codes, documentation, flow-charts, drawings, correspondence, know-how,
improvements, inventions, techniques, concepts, technologies, programs, designs,
personnel records, marketing plans and strategies, customer lists, pricing
and
bidding policies and practices, costing information, salaries, proposals to
licensors or customers, any data, confidential information or property entrusted
to Employer or any of its subsidiaries by any licensors or customers and
confidential information concerning customers or employees of Employer or any
of
its subsidiaries. Employee shall remain under this obligation of confidentiality
for a period expiring one (1) year after termination of his or her employment
hereunder (or indefinitely in the case of trade secrets) unless and until he
or
she is expressly released from it in a writing signed by Employer or he or
she
learns with certainty that the information or material in question has become
public knowledge.
5.
E
MPLOYER’S
R
IGHTS
TO
C
ERTAIN
D
ISCOVERIES
,
E
TC
.
Employee
shall disclose promptly to Employer any and all concepts, inventions,
improvements, discoveries, developments, techniques, modifications, procedures,
formulas, ideas, trade secrets, innovations, systems, programs, know-how or
designs (collectively, the “Discoveries”) related to the business or activities
of Employer that he or she conceives, develops or reduces to practice during
the
time that he or she is employed by Employer. Employee agrees that all his or
her
right, title and interest in such Discoveries shall belong to Employer, in
confirmation of which he or she shall execute deeds of assignment of such right,
title and interest to Employer, its nominees, successors or assigns, whenever
requested, without demanding separate or additional compensation therefor.
All
of the foregoing shall be the subject of the same confidentiality, nonuse and
nondisclosure requirements as are prescribed in Section 4 hereof. Any of the
Discoveries related to the business of Employer that Employee may reduce to
practice or apply for a copyright or patent on during the first six (6) months
after termination of his or her employment hereunder shall be presumed to have
been conceived by him during the time of such employment and as such shall
belong to Employer, and the burden shall be upon Employee, if he or she contends
it was not, to prove it was not by clear and convincing
evidence.
6.
A
SSISTANCE
IN
P
ROTECTING
D
ISCOVERIES
,
E
TC
.
Employee
shall assist Employer and its nominees, successors or assigns (at its or their
request) in every proper way during and following the period of his or her
employment (entirely at its or their expense) to obtain and maintain for its
or
their own benefit copyrights or patents in any and all countries for all
Discoveries described in Section 5 hereof. Such assistance shall include, but
not be limited to, the execution and delivery of all lawful papers and documents
of every nature which relate to the securing and maintenance of such copyrights
and patent rights, and the performance of all other lawful acts, such as the
giving of testimony in any interference proceedings, infringement suits, or
other litigation, as may be deemed necessary or advisable by Employer or its
nominees, successors or assigns.
7.
D
ELIVERY
OF
D
OCUMENTATION
,
E
TC
.
Upon
termination of his or her employment, Employee shall promptly deliver to
Employer any and all software, documents, drawings, manuals, letters, notes,
notebooks, reports, and copies thereof, and all other materials of a secret
or
confidential nature relating to Employer’s business or activities, or relating
to Employer’s customers, vendors or other business associates, that are in his
or her possession or under his or her control.
8.
C
OVENANTS
N
OT
TO
C
OMPETE
W
ITH
OR
S
OLICIT
F
ROM
EMPLOYER
.
Acknowledging that the covenants contained in this Section 8 are part of the
consideration for, and are reasonable in light of the employment and
compensation covenants of Employer contained in this Agreement, Employee hereby
covenants and agrees with Employer that, during his or her employment with
Employer and for a period expiring one (1) year after the date of termination
of
such employment, that:
(a)
During the period of such employment he or she will not directly or indirectly
compete with Employer for the business of providing products or services of
any
type provided by Employer during the term of this Agreement and will not
otherwise engage in Prohibited Competition (as such term is defined in Section
8(b)), and after termination of such employment he or she will not directly
or
indirectly compete with Employer for the business of providing products or
services (or derivative products or services) which were offered or provided
by
Employer within one (1) year prior to the termination of such employment within
that geographical area shown on Exhibit “A” attached hereto and incorporated
herein (the “Territory”) nor otherwise engage in Prohibited Competition. The
Territory is hereby acknowledged by both Employer and Employee as comprising
the
primary territory served by Employer and the territory in which Employer has
actively solicited customers as of the date hereof.
(b)
“Prohibited Competition” shall consist of acting as consultant, advisor,
independent contractor, officer, manager, employee, principal, agent, trustee
of
any corporation, partnership, association or agent or agency, or directly or
indirectly owning more than one (1%) percent of the outstanding capital stock
of
any corporation, or being a member or employee of any partnership or any owner
or employee of any other business, any of which conducts a business in
competition with Employer or any of its subsidiaries for the duration of this
noncompetition agreement as set forth herein. “Prohibited Competition” shall
also include (in addition to the foregoing):
(i)
Accepting employment with a customer of Employer or Employer’s affiliates with
the intent or purpose of transferring business performed by Employer or
Employer’s affiliates to a department, division of affiliate of the
customer;
(ii)
Requesting or advising any of the customers, suppliers or other business
contacts of Employer or Employer’s affiliates to withdraw, curtail, cancel or
not increase their business with Employer or Employer’s affiliates;
or
(iii)
Causing or inducing, or attempting to cause or induce, either directly or
indirectly, any employees, sales representatives, consultants or other personnel
of Employer or Employer’s affiliates to terminate their relationships or
employment or breach their agreements with Employer or Employer’s affiliates,
whether for the purpose of accepting employment with Employee or any other
person, firm, association or corporation with which Employee is associated,
or
otherwise, or hiring any employee of Employer or its affiliates within four
(4)
months of such person having left the employ of Employer or of such
affiliate.
9.
I
NJUNCTIVE
R
ELIEF
.
Employee
recognizes that the breach of any of his or her obligations under Sections
4, 5,
6, 7 or 8 hereof will give rise to irreparable injury to Employer inadequately
compensable in damages and that, accordingly, Employer shall be entitled to
injunctive relief against the breach or threatened breach of the within
undertaking, without the requirement of posting a bond, in addition to other
remedies at law or in equity which may be available.
10.
T
ERM
.
The term
of this Agreement shall begin on the effective date of this Agreement and shall
terminate on the third anniversary hereof, unless sooner terminated by either
party in the manner set forth below
.
Either
Employer or Employee may terminate Employee’s employment at any time by giving
thirty (30) days’ prior written notice to the other. In addition, Employer shall
have the right at any time to terminate Employee’s employment immediately for
cause. Any action by Employer to terminate Employee’s employment shall be deemed
“for cause” if:
(a)
Employee is unable to perform the essential functions of his or her job, with
or
without reasonable accomodation, (i) as a result of the habitual use of alcohol
or drugs; or (ii) failure to perform his or her duties after written notice
of
such failure;
(b)
Employee has disclosed any material secret or confidential information of
Employer or any subsidiary thereof without the consent of Employer or has
violated or disregarded any other material duties, obligations or expected
conduct as an employee of Employer;
(c)
Employee has committed any act or omitted to take any action in bad faith and
to
the detriment of Employer or any affiliate thereof;
(d)
Employee has committed (i) any felony; or (ii) any misdemeanor or other illegal
conduct involving dishonesty, fraud or other matters of moral turpitude;
or
(e)
Employee has acted against, or failed or omitted to act in, the best interests
of Employer or any affiliate thereof, as determined in good faith by the Board
of Directors of Employer.
Employee’s
obligations under Sections 4, 5, 6, 7, 8
and
12
hereof
shall survive and continue in effect following any termination of
employment.
11.
S
EVERANCE
.
If
Employer should terminate Employee’s employment for any reason other than for
cause pursuant to the preceding Section 10, Employee shall be paid an amount
equal to his or her then-current monthly salary multiplied by the number of
months remaining under this agreement, which payment shall be considered
additional consideration for the noncompetition agreements set out in Section
8
hereof. Employee shall also be paid all unpaid annual bonuses for the remaining
years under this agreement, in cash, at one hundred (100%) of the employee’s
then-current annual salary.
12.
L
ITIGATION
A
SSISTANCE
.
Employee
shall, for a period of five (5) years after termination of his or her employment
hereunder, at no cost to Employer, unless otherwise provided herein, diligently
and fully cooperate with Employer, including testifying, answering
interrogatories, being deposed, and generally providing information and fully
cooperating with the defense or prosecution of any suit or cause of action
brought by or defended by Employer based upon any facts relating to any contact
or matter which originated during Employee’s employment by Employer. Employer
agrees to provide reasonable travel expenses pursuant to its current business
travel policy for Employee’s assistance and cooperation in all such actions or
suits, if required. Any requests for time away from Employee’s work must be
reasonably acceptable to Employee, and Employee shall be compensated on a per
diem basis based on Employee’s annual salary on the day before termination of
this Agreement.
13.
A
SSIGNMENT
.
The
rights and benefits of Employee under this Agreement, other than accrued and
unpaid amounts due under Section 3 hereof, are personal to him and shall not
be
assignable. Discharge of Employee’s undertakings in Sections 4, 5, 6, 7 and 8
hereof shall remain an obligation of Employee’s executors, administrators, or
other legal representatives or assigns.
1
4.
N
OTICES
.
All
notices, demands, requests, or other communications which may be or are required
to be given, served, or sent by either party to the other party pursuant to
this
Agreement shall be in writing and shall be hand delivered (including delivery
by
courier so long as a receipt or confirmation of delivery is obtained), sent
by
Federal Express or other recognized overnight delivery service, mailed by
first-class, registered or certified mail, return receipt requested, postage
prepaid, or transmitted by facsimile transmission (followed by delivery of
the
original of such document), addressed as set forth below. Either party hereto
may designate by notice, in the manner herein above provided, a new address
to
which any notice, demand, request or communication may thereafter be so given,
served or sent. Each notice, demand, request or communication which shall be
mailed, delivered, or transmitted in the manner described above shall be deemed
sufficiently given, served, sent and received for all purposes at such time
as
it is delivered to the addressee (with the return receipt, the delivery receipt,
the affidavit of messenger or (with respect to a facsimile transmission) the
answer back being deemed conclusive evidence of such delivery) or at such time
as delivery is refused by the addressee upon presentation.Any notice or other
communications under this Agreement shall be in writing, signed by the party
making the same, and shall be delivered personally or sent by certified or
registered mail, postage prepaid, addressed as follows:
If
to
Employee:
If
to
Employer:
Bond
Laboratories, Inc.
777
S.
Highway 101
Suite
215
Solana
Beach, California 92075
Attention:
Chief Executive Officer
Facsimile:
(858) 847-9090
15.
G
OVERNING
L
AW
.
This
Agreement shall be interpreted and enforced in accordance with the laws of
the
State of California.
16.
S
EVERABILITY
.
The
parties agree that construction of this Agreement shall be in favor of its
reasonable nature, legality and enforceability, and that any construction
causing unenforceability shall yield to a construction permitting
enforceability. It is agreed that the noncompetition, nonsolicitation,
nondisclosure and nonhiring covenants and provisions of this Agreement are
severable, and that if any single covenant or provision or multiple covenants
or
provisions should be found unenforceable, the entire Agreement and remaining
covenants and provisions shall not fail but shall be construed and enforceable
without any severed covenant or provision in accordance with the tenor of this
Agreement. The parties specifically agree that no covenant or provision of
this
Agreement shall be invalidated because of overbreadth insofar as the parties
acknowledge the scope of the covenants and provisions contained herein to be
reasonable and necessary for the protection of Employer and not unduly
restrictive upon Employee. However, should a court or any other trier of fact
or
law determine not to enforce any covenant or provision of this Agreement as
written due to overbreadth, then the parties agree that said covenant or
provision shall be enforced to the extent reasonable, with the court or such
trier to make any necessary revisions to said covenant or provision to permit
its enforceability, whether said revisions be in time, territory, or scope
of
prohibited activities.
17.
E
NTIRE
A
GREEMENT
.
This
Agreement contains the entire agreement of the parties hereto with respect
to
the subject matter contained herein. There are no restrictions, promises,
covenants, or undertakings, other than those expressly set forth herein. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to such subject matter. This Agreement may not be changed except
by
a writing executed by the parties.
18.
H
EADINGS
.
The
headings contained herein are for convenience of reference only and are not
intended to define, limit, expand or describe the scope or intent of any
provision of this Agreement.
19.
C
OUNTERPARTS
.
This
Agreement may be executed in any number or counterparts, each of which shall
be
deemed a part of the same original.
I
N
W
ITNESS
W
HEREOF
,
the
undersigned have executed this Agreement under seal as of the day and year
first
above written.
EMPLOYER:
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EMPLOYEE:
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B
OND
L
ABORATORIES
,
I
NC
.
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By:
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Name:
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Title:
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Restricted
Territory
The
United States of America
Change
of Control
For
the
purposes of this Agreement, a “Change of Control” shall mean a change in control
of Employer of a nature that would be required to be reported (assuming such
event has not been “previously reported”) in response to Item 1(a) of a Current
Report on Form 8-K pursuant to Section 13 or 15(d) of the Exchange Act of 1934
(the “Exchange Act”); provided that, without limitation, a Change in Control
shall also be deemed to have occurred at such time as:
(a)
Any
“person” within the meaning of Section 14(d) of the Exchange Act, other than
Employer, a subsidiary, or any employee benefit plan(s) sponsored by Employer
or
any subsidiary thereof, is or has become the “beneficial owner,” as defined in
Rule 13d-3 under the Exchange Act, directly or indirectly, of fifty percent
(50%) or more of the combined voting power of the outstanding securities of
Employer ordinarily having the right to vote at the election of directors;
or
(b)
Individuals
who constitute the Board immediately prior to any meeting of stockholders (the
“Incumbent Board”) have ceased for any reason to constitute at least a majority
thereof, provided that any person becoming a director whose election, or
nomination for election by Employer’s stockholders, was approved by a vote of at
least three-quarters (3/4) of the directors comprising the Incumbent Board
(either by a specific vote or by approval of the proxy statement of Employer
in
which such person is named as a nominee for director without objection to such
nomination) shall be, for purposes of this Agreement, considered as though
such
person were a member of the Incumbent Board; or
(c)
Upon
approval by Employer’s stockholders of a reorganization, merger, share exchange
or consolidation, other than one with respect to which those persons who were
the beneficial owners, immediately prior to such reorganization, merger, share
exchange or consolidation, of outstanding securities of Employer ordinarily
having the right to vote in the election of directors own, immediately after
such transaction, more than fifty percent (50%) of the outstanding securities
of
the resulting corporation ordinarily having the right to vote in the election
of
directors; or
(d)
Upon
approval by Employer’s stockholders of a complete liquidation and dissolution of
Employer or the sale or other disposition of all or substantially all of the
assets of Employer other than to a subsidiary thereof.