Nevada
|
|
20-3464383
|
(State
of Incorporation)
|
|
(IRS
Employer Identification No.)
|
Large
accelerated filer
|
☐
|
Accelerated
filer
|
☐
|
Non–Accelerated
filer
|
☐
|
Small
reporting company
|
☒
|
|
|
Emerging
growth company
|
☐
|
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PAGE
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PART I
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1
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1
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8
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12
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12
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13
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13
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PART II
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14
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14
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15
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15
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20
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21
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21
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21
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22
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PART III
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22
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22
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27
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29
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32
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32
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PART IV
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33
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33
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Form 10-K Summary |
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33
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34
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CERTIFICATIONS
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Exhibit 31
– Certification pursuant to Rule 13a-14(a) and
15d-14(a)
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Exhibit 32
– Certification pursuant to 18 U.S.C 1350 as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002
|
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High
|
Low
|
Fiscal Year 2017
|
|
|
First Quarter
(January - March 2017)
|
$
0.90
|
0.59
|
Second Quarter
(April - June 2017)
|
$
0.70
|
0.46
|
Third Quarter
(July - September 2017)
|
$
0.51
|
0.30
|
Fourth Quarter
(October - December 2017)
|
$
0.44
|
0.21
|
|
|
|
Fiscal Year 2016
|
|
|
First Quarter
(January - March 2016)
|
$
1.57
|
1.03
|
Second Quarter
(April - June 2016)
|
$
1.56
|
1.00
|
Third Quarter
(July - September 2016)
|
$
1.92
|
1.35
|
Fourth Quarter
(October - December 2016)
|
$
1.87
|
0.87
|
Name
|
|
Age
|
|
Title
|
Dayton Judd
(1)
|
|
46
|
|
Interim Chief Executive Officer, Chairman
|
Michael Abrams
|
|
48
|
|
Chief Financial Officer, Director
|
Lewis Jaffe
|
|
61
|
|
Director
|
Grant Dawson
|
|
49
|
|
Director
|
Seth Yakatan
|
|
47
|
|
Director
|
Todd Ordal
|
|
60
|
|
Director
|
|
|
|
|
Members:
|
|
Grant
Dawson (Chairman)
|
|
|
|
Lewis
Jaffe
|
|
|
|
Todd
Ordal
|
|
|
|
|
|
Number of Meetings in 2017:
|
|
The
Audit Committee held four meetings during 2017.
|
|
|
|
|
|
Functions:
|
|
The
Audit Committee provides assistance to the Board of Directors in
fulfilling its legal and fiduciary obligations in matters involving
our accounting, auditing, financial reporting, internal control and
legal compliance functions by approving the services performed by
our independent accountants and reviewing their reports regarding
our accounting practices and systems of internal accounting
controls. The Audit Committee also oversees the audit efforts of
our independent accountants and takes those actions as it deems
necessary to satisfy it that the accountants are independent of
management.
|
|
|
|
|
|
Independence
|
|
The members of the Audit Committee each meet the
independence standards established by the NASDAQ Stock Market and
the Securities and Exchange Commission (the
“
SEC
”) for audit committees. In addition, the
Board has determined that Messrs. Dawson, Jaffe and Ordal each
satisfy the definition of an “audit committee financial
expert” under SEC rules and regulations. These designations
do not impose any duties, obligations or liabilities on Messrs.
Dawson, Jaffe and Ordal that are greater than those generally
imposed on them as members of the Audit Committee and the Board,
and their designations as audit committee financial experts does
not affect the duties, obligations or liability of any other member
of the Audit Committee or the Board
|
|
|
|
|
|
Members:
|
|
Grant Dawson (Chairman)
|
|
|
|
Lewis Jaffe
|
|
|
|
Seth Yakatan
|
|
|
|
|
|
Number of Meetings in 2017:
|
|
The Compensation Committee held 0 meetings during 2017, electing
instead to address compensation matters by action taken by the
entire Board of Directors.
|
|
|
|
|
|
Functions:
|
|
The Compensation Committee determines our general compensation
policies and the compensation provided to our directors and
officers. The Compensation Committee also reviews and determines
bonuses for our officers and other employees. In addition, the
Compensation Committee reviews and determines equity-based
compensation for our directors, officers, employees and consultants
and administers our stock option plans and employee stock purchase
plan.
|
|
|
|
|
|
Independence
|
|
We believe that the composition of our Compensation Committee meets
the criteria for independence under, and the functioning of our
Compensation Committee complies with, the applicable requirements
of the Sarbanes-Oxley Act of 2002 and current SEC rules and
regulations.
|
|
|
|
|
|
Members
:
|
|
Lewis Jaffe (Chairman)
|
|
|
|
Todd Ordal
|
|
|
|
Seth Yakatan
|
|
|
|
|
|
Number of Meetings in 2017
:
|
|
The Nominating and Corporate Governance Committee held one meeting
during 2017.
|
|
|
|
|
|
Functions
:
|
|
The Nominating and Corporate Governance Committee is responsible
for making recommendations to the Board of Directors regarding
candidates for directorships and the size and composition of the
Board. In addition, the Nominating and Corporate Governance
Committee is responsible for overseeing our corporate governance
guidelines and reporting and making recommendations to the Board
concerning corporate governance matters.
|
|
|
|
|
|
Independence
|
|
We believe that the composition of our Nominating and Corporate
Governance Committee meets the criteria for independence under, and
the functioning of our Nominating and Corporate Governance
Committee complies with, the applicable requirements of the
Sarbanes-Oxley Act of 2002 and current SEC rules and
regulations.
|
|
●
|
Mr. Jaffe, a director, filed one late Form 4 disclosing two late
transactions, and one Form 5 disclosing one late
transaction;
|
●
|
Mr. Ordal, filed one late Form 4 disclosing three late
transactions; and
|
●
|
Mr. Dawson, a director, filed one late Form 4 disclosing two late
transactions.
|
Name and Principal Position
|
|
Year
|
|
Salary and Bonus ($)
|
|
|
Stock
Awards ($)
|
|
|
Warrants/
Option Awards ($)
(1)
|
|
|
All Other
Compensation ($)
|
|
|
Total ($)
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
John Wilson
(2)
(3)
|
|
2017
|
|
$
|
326,129
|
|
|
$
|
17,000
|
|
|
$
|
-
|
|
|
$
|
22,500
|
|
|
$
|
365,629
|
|
|
Former CEO and Director
|
|
2016
|
|
$
|
284,500
|
|
|
$
|
83,000
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
367,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael Abrams
(4)
|
|
2017
|
|
$
|
267,193
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
50,000
|
|
|
$
|
317,193
|
|
|
CFO and Director
|
|
2016
|
|
$
|
250,000
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
250,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Patrick Ryan
(5)
|
|
2017
|
|
$
|
246,402
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
246,838
|
|
|
Chief Retail Officer
|
|
2016
|
|
$
|
247,550
|
|
|
$
|
-
|
|
|
$
|
15,222
|
|
|
$
|
3,643
|
|
|
$
|
266,415
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The amounts in this column represent the grant date fair value of
stock option awards computed in accordance with FASB guidance,
excluding the effect of estimated forfeitures under which the Named
Executive Officer has the right to purchase, subject to vesting,
shares of the Company’s common stock.
|
|
|
(2)
|
Mr. Wilson resigned from his position as Chief Executive Officer
and as a member of the Company’s Board of Directors on
February 18, 2018, subsequent to the year ended December 31,
2017.
|
|
|
(3)
|
All Other Compensation includes $22,500 paid Mr. Wilson equal to
the pro-rata amount of his salary increase in 2017 as if the
increase would have been effective on the date his employment
agreement expired.
|
|
|
(4)
|
All Other Compensation includes $50,000 paid Mr. Abrams equal to
the pro-rata amount of his salary increase in 2017 as if the
increase would have been effective on the date his employment
agreement expired.
|
|
|
(5)
|
All Other Compensation includes $3,643 paid to Mr. Ryan for an
automobile allowance.
|
|
Option Awards
|
Stock Awards
|
|||||||
Name
|
Number of securities underlying unexercised options (#)
exercisable
|
Number of securities underlying unexercised options (#)
unexercisable
|
Equity incentive plan awards: Number of underlying unexercised
unearned options (#)
|
Option
Exercise price ($)
|
Option expiration date
|
Number of shares or units of stock that have not vested
(#)
|
Market value of shares or units of stock that have not vested
($)
|
Equity incentive plan awards: Number of Unearned shares, units or
other rights that have not vested (#)
|
Equity incentive plan awards: Market or Payout value of unearned
shares, units or other rights that have not vested ($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John Wilson
|
75,000
|
-
|
-
|
$
2.30
|
02/23/20
|
-
|
-
|
-
|
-
|
Former Chief Executive Officer
and President
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
Michael Abrams
|
50,000
|
-
|
-
|
$
0.90
|
1/16/18
|
-
|
-
|
-
|
-
|
Chief Financial Officer and
Director
|
50,000
|
-
|
-
|
$
2.30
|
02/23/20
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
Patrick Ryan
|
20,000
|
-
|
-
|
$
2.20
|
04/11/19
|
-
|
-
|
-
|
-
|
Chief Retail Officer
|
30,000
|
-
|
-
|
$
2.30
|
02/23/20
|
-
|
-
|
-
|
-
|
|
16,667
|
13,333
|
-
|
$
1.39
|
05/09/21
|
-
|
-
|
-
|
-
|
|
Fees earned or paid in cash
(1)
|
Stock awards
|
Option awards
(2)
|
Total
|
Name
|
($)
|
($)
|
($)
|
($)
|
|
|
|
|
|
Lewis
Jaffe
|
$
39,000
|
$
17,715
|
$
-
|
$
56,715
|
Grant
Dawson
|
$
24,375
|
$
24,375
|
$
-
|
$
48,750
|
Seth
Yakatan
|
$
48,750
|
$
-
|
$
-
|
$
48,750
|
Todd
Ordal
|
$
24,375
|
$
24,375
|
$
-
|
$
48,750
|
Dayton Judd
(3)
|
$
14,134
|
$
12,500
|
$
-
|
$
26,634
|
(1)
|
In an effort to conserve the Company’s cash, certain Board
members have the option to receive stock awards in lieu of cash
fees earned in respect of their annual retainers for service on the
Board and its committees. The stock awards vested immediately
upon grant and were not subject to any further service by the
directors. The amounts in this column represent the grant date fair
value of the restricted stock awards granted during 2017 and are
computed in accordance with FASB guidance, excluding the effect of
estimated forfeitures.
|
|
|
(2)
|
Represents the grant date fair value of stock option awards
computed in accordance with FASB guidance, excluding the effect of
estimated forfeitures under which the director has the right to
purchase, subject to vesting, shares of the Company’s common
stock.
|
|
|
(3)
|
Mr. Judd joined the Company’s Board of Directors in June
2017. He served as an independent director until his appointment as
the Company’s Interim Chief Executive Officer in February
2018.
|
|
|
Name and Address of Owner
|
Title of Class
|
Number of
Shares Owned
|
Percentage
of Class
(1)
|
|
|
|
|
Dayton Judd
(2)(3)(9)
|
Common
Stock
|
1,053,715
|
9.7
%
|
|
|
|
|
Michael Abrams
(2)(4)
|
Common
Stock
|
305,466
|
2.8
%
|
|
|
|
|
Patrick Ryan
(2)(5)
|
Common
Stock
|
67,724
|
*
%
|
|
|
|
|
Lewis Jaffe
(2)(6)
|
Common
Stock
|
118,586
|
1.1
%
|
|
|
|
|
Todd Ordal
(2)
|
Common
Stock
|
77,315
|
*
%
|
|
|
|
|
Seth Yakatan
(2)
|
Common
Stock
|
88,298
|
*
%
|
|
|
|
|
Grant Dawson
(2)(7)
|
Common
Stock
|
126,550
|
1.2
%
|
|
|
|
|
Jenna Sinnett
(10)
|
Common
Stock
|
151,757
|
1.4
%
|
|
|
|
|
All
Officers and Directors as a group (eight persons)
|
Common
Stock
|
1,989,410
|
17.8
%
|
|
|
|
|
Stephen Adele
(8)
2263 South Loveland Street
Lakewood, CO 80228
|
Common
Stock
|
973,899
|
8.9
%
|
(1)
|
* Less than 1%
|
(2)
|
The address of each of the officers and directors is c/o Fitlife
Brands, Inc., 5214 S. 136th Street, Omaha, NE
68137
.
|
|
|
(3)
|
Mr. Judd exercises sole voting and dispositive power over 260,715
shares, and shared voting and dispositive power over 793,000
reported shares, which are owned by Sudbury Holdings, LLC, as set
forth in Footnote 9 to this table.
|
|
|
(4)
|
Includes 50,000 shares issuable upon the exercise of stock options
at $2.30 per share, exercisable within 60 days of March 31,
2018.
|
|
|
(5)
|
Includes 66,667 shares issuable upon the exercise of stock options
of which 30,000, 20,000 and 16,667 are exercisable at $2.30, $2.20
and $1.39 per share, respectively, and each group is exercisable
within 60 days of March 31, 2018.
|
|
|
(6)
|
Includes 15,000 shares issuable upon the exercise of stock options
at $2.30 per share, each exercisable within 60 days of March 31,
2018.
|
|
|
(7)
|
Includes 10,000 shares issuable upon the exercise of stock options
at $2.30 per share, exercisable within 60 days of March 31,
2018.
|
|
|
(8)
|
Mr. Adele is the former Chief Innovation Officer and a former
Director of the Company. Includes 55,898 shares issuable upon the
exercise of stock options, each exercisable within 60 days of March
31, 2018.
|
|
|
(9)
|
793,000 shares are held by Sudbury Capital Fund, LP, Sudbury
Holdings, LLC, Sudbury Capital GP, LP, and Sudbury Capital
Management, LLC. Sudbury Holdings, LLC is the parent company of
Sudbury Capital Fund, LP; Sudbury Capital GP, LP is the general
partner of Sudbury Capital Fund, LP; Sudbury Capital Management,
LLC is the investment adviser of Sudbury Capital Fund, LP; and Mr.
Judd as a member of Sudbury Holdings, LLC and Sudbury Capital
Management, LLC, and a limited partner of Sudbury Capital GP, LP.
Dayton Judd may be considered the beneficial owner of the shares
held by Sudbury Capital Fund, LP, as Mr. Judd is the Founder and
Managing Partner of Sudbury Capital Management, LLC.
|
(10)
|
Includes
137,778 shares issuable upon the exercise of stock options of which
100,000, 10,000 and 27,778 are exercisable at $2.30, $2.20 and
$1.39 per share, respectfully, and each group is exercisable within
60 days of March 31, 2018.
|
Plan category
|
Number of
securities to be issued upon exercise of
outstanding options, warrants and rights
|
Weighted-
average exercise
price of
outstanding
options, warrants
and rights
|
Number of
securities
remaining
available
for future issuance
under equity
compensation
plans
(excluding
securities
reflected in
column (a)
|
|
(a)
|
(b)
|
(c)
|
Equity compensation plans approved by security
holders:
|
810,284
|
$
2.85
|
689,716
|
|
|
|
|
Equity compensation plans not approved by security
holders:
|
–
|
–
|
–
|
|
|
|
|
Total
|
810,284
|
$
2.85
|
689,716
|
|
Year Ended
December 31,
|
|
|
2017
|
2016
|
Audit Fees
(1)
|
$
79,250
|
$
74,774
|
Audit-Related Fees
(2)
|
—
|
—
|
Tax Fees
(3)
|
5,500
|
11,150
|
All Other Fees
(4)
|
3,875
|
—
|
|
|
|
Total
|
$
88,625
|
$
85,924
|
(1)
|
Audit Fees include all services that are performed to comply with
Generally Accepted Auditing Standards (“
GAAS
”). In addition, this category includes fees
for services that normally would be provided by the accountant in
connection with statutory and regulatory filings or engagements,
such as audits, quarterly reviews, attest services, statutory
audits, comfort letters, consents, reports on an issuer’s
internal controls, and review of documents to be filed with the
SEC. Certain services, such as tax services and accounting
consultations, may not be billed as audit services. To the extent
that such services are necessary to comply with GAAS (i.e., tax
accrual work), an appropriate allocation of those fees is in this
category.
|
(2)
|
Audit-Related Fees include assurance and related services that are
traditionally performed by an independent accountant such as
employee benefit plan audits, due diligence related to mergers and
acquisitions, accounting assistance and audits in connection with
proposed or consummated acquisitions, and special assignments
related to internal control reviews.
|
(3)
|
Tax Fees include all services performed by an accounting
firm’s tax division except those related to the audit.
Typical services include tax compliance, tax planning and tax
advice.
|
(4)
|
All Other Fees include fees for any service not addressed in the
other three categories above.
|
|
Agreement
and Plan of Merger, by and among the Company, iSatori, Inc., and
ISFL Merger Sub, Inc., dated May 18, 2015 (incorporated by
reference to Exhibit 2.1 filed with Form 8-K on May 18,
2015).
|
|
|
Voting
and Standstill Agreement dated May 18, 2015 (incorporated by
reference to Exhibit 4.1 of Schedule 13D (Commission File No.
005-47773) filed by the Company, Stephen Adelé Enterprises,
Inc., Stephen Adelé, RENN Universal Growth Investment Trust,
PLC, RENN Global Entrepreneurs Fund, Inc. and Russell
Cleveland).
|
|
|
Articles
of Incorporation (incorporated by reference to Exhibit 3.1 filed
with Amendment No. 3 to the Company’s Registration Statement
on Form SB2 (Commission File No. 333-137170)).
|
|
|
Amendments
to Articles of Incorporation (incorporated by reference to Exhibit
3.2 filed with Amendment No. 3 to the Company’s Registration
Statement on Form SB2 (Commission File No.
333-137170)).
|
|
|
Amended
and Restated Bylaws of the Corporation (incorporated by reference
to Exhibit 3.1 filed with Form 8-K on January 25,
2018).
|
|
|
Certificate
of Amendment to Articles of Incorporation (incorporated by
reference to Exhibit 3.1 filed with Form 8-K on September 13,
2010).
|
|
|
Certificate
of Amendment to Articles of Incorporation to change name to FitLife
Brands, Inc. (incorporated by reference to Exhibit 3.1
filed with Form 8-K on October 1, 2013).
|
|
|
Certificate
of Amendment to Articles of Incorporation to effect 1-for-10
reverse split (incorporated by reference to Exhibit 3.1 filed with
Form 8-K on October 1, 2013).
|
|
|
Certificate
of Designations of Series A Convertible Preferred Stock
(incorporated by reference to Exhibit 4.2 filed with Form 8-K on
June 30, 2008).
|
|
|
Certificate
of Designations of Series B Convertible Preferred Stock
(incorporated by reference to Exhibit 10.1 filed with Form 8-K on
January 23, 2009).
|
|
|
Certificate
of Designations of Series C Convertible Preferred Stock.
(incorporated by reference to Exhibit 4.3 filed with Form 10-K on
April 15, 2011).
|
|
|
Asset
Purchase Agreement between the Company and NDS Nutritional
Products, Inc. (incorporated by reference to Exhibit 10.1 filed
with Form 8-K on October 15, 2008).
|
|
|
Settlement
Agreement (incorporated by reference to Exhibit 10.1 filed with
Form 8-K on October 6, 2009).
|
|
|
Secured
Promissory Note (incorporated by reference to Exhibit 10.2 filed
with Form 8-K on October 6, 2009).
|
|
|
Second
Amendment to Asset Purchase Agreement (incorporated by reference to
Exhibit 10.3 filed with Form 8-K on October 6, 2009).
|
|
|
Amendment
No. 1 to Security Agreement (incorporated by reference to Exhibit
10.4 filed with Form 8-K on October 6, 2009).
|
|
|
Amendment
No. 1 to Supply, License and Transition Agreement (incorporated by
reference to Exhibit 10.5 filed with Form 8-K on October 6,
2009).
|
|
|
Assignment
of Name (incorporated by reference to Exhibit 10.6 filed with Form
8-K on October 6, 2009).
|
|
|
Consulting
Agreement for Services between the Company and Burnham Hill
Advisors LLC, dated August 20, 2009 (incorporated by reference to
Exhibit 99.1 filed with the Form 8-K on August 26,
2009).
|
|
|
Consulting
Agreement for Services between the Company and Burnham Hill
Advisors LLC, dated August 20, 2010 (incorporated by reference to
Exhibit 99.1 filed with Form 8-K on August 23, 2010).
|
|
|
Amendment
No. 1 to Consulting Agreement between the Company and Burnham Hill
Advisors LLC, dated September 15, 2010. (incorporated by
reference to Exhibit 10.12 filed with Form 10-K on April 15,
2011).
|
|
|
Amendment
No. 2 to Consulting Agreement between the Company and Burnham Hill
Advisors LLC, dated November 18, 2010. (incorporated by
reference to Exhibit 10.13 filed with Form 10-K on April 15,
2011).
|
|
|
Employment
Agreement, dated December 31, 2009, between the Company and John
Wilson. (incorporated by reference to Exhibit 10.14 filed
with Form 10-K on April 15, 2011).
|
|
|
2010
Equity Incentive Plan (incorporated by reference to Exhibit 10.18
filed with Form 10-K on April 15, 2011).
|
|
|
Form
of Exchange Agreement (incorporated by reference to Exhibit 10.1
filed with Form 8-K on October 7, 2013).
|
|
|
Employment
Agreement, dated May 1, 2013, by and between the Company and
Michael Abrams (incorporated by reference to Exhibit 10.15 filed
with the Annual Report on Form 10-K on March 28,
2014).
|
|
|
Amendment
No. 2 to Employment Agreement, dated July 14, 2014 between the
Company and John Wilson (incorporated by reference to Exhibit 10.1
filed with Form 8-K on July 15, 2014).
|
|
|
Demand
Promissory Note (incorporated by reference to Exhibit 10.1 filed
with Form 8-K on September 11, 2015).
|
|
|
Security
Agreement by and among the Company, Stephen Adele Enterprises, and
Stephen Adele, dated September 11, 2015 (incorporated by reference
to Exhibit 10.2 filed with Form 8-K on September 11,
2015).
|
|
|
Employment
Agreement between the Company, and Stephen Adelé (incorporated
by reference to Exhibit 2.3 filed with Form S-4 on July 7,
2015).
|
|
|
Employment
Agreement, by and between FitLife Brands, Inc. and Patrick Ryan,
dated June 7, 2016 (incorporated by reference to Exhibit 10.1 filed
with Form 8-k on June 13, 2016).
|
|
|
Amendment
No. 3 to Employment Agreement, dated July 14, 2014 between the
Company and John Wilson (incorporated by reference to Exhibit
10.1 filed with Form 8-K on April 26, 2017).
|
|
|
Amendment
No. 1 to Employment Agreement, dated May 1, 2013, by and between
the Company and Michael Abrams (incorporated by reference to
Exhibit 10.2 filed with Form 8-K on April 26, 2017).
|
|
|
Loan
Modification Agreement, dated August 28, 2017, by and between the
Company and U.S. National Bank Association Bank (incorporated by
reference to Exhibit 10.1 filed with Form 8-K on August 31,
2017).
|
|
|
Merchant
Agreement by and between NDS Nutrition, Inc., iSatori, Inc., and
Compass Bank, d/b/a Commercial Billing Service (incorporated by
reference to Exhibit 3.1 filed with Form 8-K on January 25,
2018).
|
|
|
Continuing
Guarantee of FitLife Brands, Inc. (incorporated by reference to
Exhibit 3.1 filed with Form 8-K on January 25, 2018).
|
|
|
Consulting
Services Agreement, by and between the Company and Dayton Judd,
dated March 13, 2018.
|
|
|
Code
of Ethics (incorporated by reference to Exhibit 14.1 filed with
Form 10-K on March 27, 2009).
|
|
|
Letter
from Tarvaran, Askelson & Company, LLP, dated April 25, 2017
(incorporated by reference to Exhibit 16.1 filed with Form 8-K on
April 26, 2017).
|
|
21
|
|
List
of Subsidiaries.
|
|
Certification
of Chief Executive Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act.
|
|
|
Certification
of Principal Financial and Accounting Officer Pursuant to Section
302 of the Sarbanes-Oxley Act.
|
|
|
Certification
of Chief Executive Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act.
|
|
|
Certification
of Chief Accounting Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act.
|
Registrant
Date: April 17,
2018
|
|
FitLife Brands, Inc.
By:
/s/ Dayton
Judd
|
|
|
Dayton
Judd
|
|
|
Interim Chief
Executive Officer (Principal Executive Officer)
|
Date: April 17,
2018
|
|
By:
/s/ Michael
Abrams
|
|
|
Michael
Abrams
|
|
|
Chief Financial
Officer (Principal Financial Officer)
|
Date: April 17,
2018
|
|
By:
/s/ Dayton
Judd
|
|
|
Dayton
Judd
|
|
|
Interim Chief
Executive Officer (Principal Executive Officer), Chairman of the
Board
|
Date: April 17,
2018
|
|
By: /
s/ Michael
Abrams
|
|
|
Michael
Abrams
|
|
|
Chief Financial
Officer (Principal Financial Officer)
|
|
|
|
Date: April 17,
2018
|
|
By:
/s/ Lewis
Jaffe
|
|
|
Lewis
Jaffe
|
|
|
Director
|
Date: April 17,
2018
|
|
By:
/s/ Grant
Dawson
|
|
|
Grant
Dawson
|
|
|
Director
|
Date: April 17,
2018
|
|
By:
/s/ Seth
Yakatan
|
|
|
Seth
Yakatan
|
|
|
Director
|
Date: April 17,
2018
|
|
By:
/s/ Todd
Ordal
|
|
|
Todd
Ordal
|
|
|
Director
|
|
|
|
TABLE OF CONTENTS
|
|
Page
|
|
|
|
|
|
|
|
REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
|
|
F-1
|
|
CONSOLIDATED
FINANCIAL STATEMENTS:
|
|
|
|
|
Consolidated
Balance Sheets at December 31, 2017 and 2016
|
|
|
F-2
|
|
Consolidated
Statements of Operations for the years ended December 31, 2017 and
2016
|
|
|
F-3
|
|
Consolidated
Statements of Cash Flows for the years ended December 31, 2017 and
2016
|
|
|
F-4
|
|
Consolidated
Statement of Stockholders’ Equity for the years ended
December 31, 2017 and 2016
|
|
|
F-5
|
|
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
F-6
|
|
|
2017
|
2016
|
|
|
|
Revenue
|
$
17,799,345
|
$
25,313,601
|
|
|
|
Cost
of Goods Sold
|
12,708,460
|
15,242,537
|
Gross
Profit
|
5,090,885
|
10,071,064
|
|
|
|
OPERATING
EXPENSES:
|
|
|
General
and administrative
|
4,179,945
|
5,002,150
|
Selling
and marketing
|
3,525,202
|
4,118,414
|
Impairment
of intangible assets and goodwill
|
5,928,765
|
-
|
Depreciation
and amortization
|
409,476
|
478,235
|
Total operating expenses
|
14,043,388
|
9,598,799
|
OPERATING
INCOME (LOSS)
|
(8,952,503
)
|
472,265
|
|
|
|
OTHER
(INCOME) AND EXPENSES
|
|
|
Interest
expense
|
112,128
|
109,391
|
Other
expense (income)
|
8,075
|
(5,204
)
|
Total other (income) expense
|
120,203
|
104,187
|
|
|
|
INCOME
(LOSS) BEFORE INCOME TAXES
|
(9,072,706
)
|
368,078
|
|
|
|
INCOME
TAXES, deferred
|
689,000
|
-
|
|
|
|
NET
INCOME (LOSS)
|
$
(9,761,706
)
|
$
368,078
|
|
|
|
NET
INCOME (LOSS) PER SHARE:
|
|
|
Earnings (loss) Per Share - Basic and
diluted
|
$
(0.93
)
|
$
0.04
|
Weighted average shares - Basic and diluted
|
10,518,239
|
10,340,162
|
|
2017
|
2016
|
CASH FLOWS FROM OPERATING
ACTIVITIES:
|
|
|
Net
income (loss)
|
$
(9,761,706
)
|
$
368,078
|
Adjustments
to reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
Depreciation
and amortization
|
409,476
|
478,235
|
Increase
(decrease) in allowance for sales returns and doubtful
accounts
|
1,096,773
|
(261,541
)
|
Increase
(decrease) in allowance for inventory obsolescence
|
(90,059
)
|
41,733
|
Loss
on disposal of assets
|
5,145
|
22,970
|
Common
stock issued for services
|
95,966
|
153,002
|
Fair
value of options issued for services
|
44,189
|
58,178
|
Impairment
of intangible assets and goodwill
|
5,928,765
|
-
|
Write-off
of note receivable
|
43,727
|
-
|
Changes
in operating assets and liabilities:
|
|
|
Accounts
receivable
|
(429,153
)
|
320,360
|
Inventories
|
972,944
|
991,852
|
Deferred
taxes
|
689,000
|
-
|
Prepaid
income tax
|
120,000
|
32,000
|
Prepaid
expenses
|
(85,186
)
|
198,469
|
Customer
note receivable
|
6,750
|
13,735
|
Security
deposits
|
3,049
|
1,119
|
Accounts
payable
|
1,377,417
|
(1,767,157
)
|
Accrued
expenses and other liabilities
|
238,684
|
(602,864
)
|
Net
cash provided by operating activities
|
665,781
|
48,169
|
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|
|
Purchase
of property and equipment
|
(185,064
)
|
(23,405
)
|
Net
cash used in investing activities
|
(185,064
)
|
(23,405
)
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|
|
Proceeds
from line of credit
|
-
|
459,695
|
Repurchases
of common stock
|
-
|
(156,907
)
|
Repayments
of term loan and note payable
|
(511,825
)
|
(567,061
)
|
Net
cash used in financing activities
|
(511,825
)
|
(264,273
)
|
|
|
|
DECREASE
IN CASH
|
(31,108
)
|
(239,509
)
|
CASH,
BEGINNING OF PERIOD
|
1,293,041
|
1,532,550
|
CASH,
END OF PERIOD
|
$
1,261,933
|
$
1,293,041
|
|
|
|
Supplemental disclosure operating activities
|
|
|
|
|
|
Cash
paid for interest
|
$
112,128
|
$
109,391
|
|
Common Stock
|
Treasury
|
Additional Paid-in
|
Accumulated
|
|
|
|
Shares
|
Amount
|
Stock
|
Capital
|
Deficit
|
Total
|
|
|
|
|
|
|
|
DECEMBER
31, 2015
|
10,453,945
|
$
104,540
|
$
-
|
$
30,820,894
|
$
(20,814,637
)
|
$
10,110,797
|
|
|
|
|
|
|
|
Common
stock issued for services
|
116,722
|
1,168
|
-
|
151,834
|
-
|
153,002
|
|
|
|
|
|
|
|
Common
stock purchased and cancelled from officer
|
(86,534
)
|
(865
)
|
-
|
(111,629
)
|
-
|
(112,494
)
|
|
|
|
|
|
|
|
Common
stock cancelled
|
(85,833
)
|
(858
)
|
-
|
858
|
-
|
-
|
|
|
|
|
|
|
|
Treasury
stock
|
-
|
-
|
(44,413
)
|
-
|
-
|
(44,413
)
|
|
|
|
|
|
|
|
Common
stock issued upon cashless exercise of options
|
85,089
|
851
|
-
|
(851
)
|
-
|
-
|
|
|
|
|
|
|
|
Fair
value of options issued for services
|
-
|
-
|
-
|
58,178
|
-
|
58,178
|
|
|
|
|
|
|
|
Net
income
|
-
|
-
|
-
|
-
|
368,078
|
368,078
|
|
|
|
|
|
|
|
DECEMBER
31, 2016
|
10,483,389
|
104,836
|
(44,413
)
|
30,919,284
|
(20,446,559
)
|
10,533,148
|
|
|
|
|
|
|
|
Common
stock issued for services
|
240,241
|
2,402
|
-
|
93,564
|
-
|
95,966
|
|
|
|
|
|
|
|
Cancellation
of treasury stock
|
(41,920
)
|
(419
)
|
44,413
|
(43,994
)
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair
value of options issued for services
|
-
|
-
|
-
|
44,189
|
-
|
44,189
|
|
|
|
|
|
|
|
Net
loss
|
-
|
-
|
-
|
-
|
(9,761,706
)
|
(9,761,706
)
|
|
|
|
|
|
|
|
DECEMBER
31, 2017
|
10,681,710
|
$
106,819
|
$
-
|
$
31,013,043
|
$
(30,208,265
)
|
$
911,597
|
Asset
Category
|
|
Depreciation
/ Amortization Period
|
Furniture
and Fixture
|
|
3
Years
|
Office
equipment
|
|
3
Years
|
Leasehold
improvements
|
|
5
Years
|
|
December
31,
|
December
31,
|
|
2017
|
2016
|
Net income (loss)
available for common shareholders
|
$
(9,761,706
)
|
$
368,078
|
Weighted average
common shares outstanding – Basic and diluted
|
10,518,239
|
10,340,162
|
Income (loss) per
share – Basic and diluted
|
(0.93
)
|
0.04
|
|
December
31,
|
|
|
2017
|
2016
|
Finished
goods
|
$
2,462,530
|
$
3,069,531
|
Components
|
411,301
|
687,185
|
Total
|
$
2,873,831
|
$
3,756,716
|
|
December
31,
|
|
|
2017
|
2016
|
Equipment
|
$
971,820
|
$
792,930
|
Accumulated
depreciation
|
$
(676,633
)
|
$
(621,926
)
|
Total
|
$
295,187
|
$
171,004
|
|
|
December
31,
2017
|
December
31,
2016
|
Revolving line of
credit of $3.0 million from U.S. Bank National Association
(“
U.S. Bank
”),
dated April 9, 2009, as amended July 15, 2010, May 25, 2011, August
22, 2012, April 29, 2013, May 22, 2014, June 25, 2014, May 15,
2015, August 15, 2016 and August 28, 2017, at an effective interest
rate equal to the prime rate announced from time to time by U.S.
Bank plus 0.50%. The line of credit matured on June 15, 2017;
however
,
U.S. Bank extended
the maturity date of the line of credit until December 15, 2017.
The line of credit is secured by substantially all the assets of
the Company. As a result of the August 28, 2017 amendment, the
Company agreed to amended and additional loan covenants and certain
additional terms. Advances to the Company under the amended line of
credit are based solely on 80% of the eligible receivables of the
Company. The Company pays interest only on this line of credit. The
Company received a notice of default from U.S. Bank resulting from
a violation of a loan covenant set forth in the amended line of
credit.
|
|
$
1,950,000
|
$
1,950,000
|
Term loan of
$2,600,000 from US Bank, dated September 4, 2013, at a fixed
interest rate of 3.6%. The term loan amortizes evenly on a monthly
basis and matures August 15, 2018.
|
|
414,877
|
914,003
|
|
|
|
|
Notes payable for
warehouse equipment
|
|
-
|
12,700
|
Total of notes
payable and advances
|
|
2,364,877
|
2,876,703
|
Less current
portion
|
|
(2,364,877
)
|
(2,507,526
)
|
|
|
|
|
Long-term
portion
|
|
$
-
|
$
369,177
|
|
Number of
Options
|
Weighted
Average Exercise Price
|
Weighted
Average Remaining Life (Years)
|
Outstanding,
December 31, 2015
|
902,205
|
$
2.80
|
6.34
|
Issued
|
219,000
|
$
1.39
|
|
Exercised
|
(90,064
)
|
0.06
|
|
Forfeited
|
(61,217
)
|
1.62
|
|
Outstanding,
December 31, 2016
|
969,924
|
$
2.81
|
5.12
|
Issued
|
-
|
-
|
|
Exercised
|
-
|
-
|
|
Forfeited
|
(99,640
)
|
3.65
|
|
Outstanding,
December 31, 2017
|
870,284
|
$
2.71
|
4.16
|
Outstanding
|
Exercise
Price
|
Issuance
Date
|
Expiration
Date
|
50,000
|
$
0.90
|
01/16/13
|
01/16/18
|
10,000
|
$
1.00
|
03/04/13
|
03/04/18
|
212,074
|
$
1.39
|
05/09/16
|
05/09/21
|
4,330
|
$
1.44
|
09/29/15
|
09/29/25
|
40,000
|
$
2.20
|
04/11/14
|
04/11/19
|
370,000
|
$
2.30
|
02/23/15
|
02/23/20
|
93,503
|
$
3.31
|
02/16/12
|
02/16/22
|
18,966
|
$
4.62
|
05/13/15
|
05/13/25
|
4,330
|
$
5.49
|
04/08/15
|
04/08/25
|
1,732
|
$
5.81
|
03/05/15
|
03/05/25
|
32,331
|
$
5.89
|
03/23/15
|
03/23/25
|
8,660
|
$
12.13
|
09/17/13
|
09/17/23
|
7,038
|
$
12.99
|
11/14/12
|
09/27/22
|
17,320
|
$
14.43
|
01/16/13
|
11/30/22
|
870,284
|
|
|
|
Outstanding
|
Exercise
Price
|
Grant
Date
|
Expiration
Date
|
17,320
|
$
12.99
|
10/01/13
|
01/01/18
|
43,300
|
$
12.99
|
07/16/13
|
07/16/18
|
60,620
|
|
|
|
|
December
31,
2017
|
December
31,
2016
|
Net operating loss
carryforward
|
2,236,000
|
2,585,515
|
Allowances for
sales returns, bad debt and inventory
|
392,000
|
-
|
Share based
compensation
|
167,000
|
39,000
|
Other
|
76,000
|
(3,000
)
|
Total deferred
asset
|
2,871,000
|
1,932,515
|
Valuation
allowance
|
(2,871,000
)
|
(1,932,515
)
|
|
|
|
Net deferred tax
asset
|
$
-
|
$
689,000
|
Years ending
December 31,
|
Amount
|
2018
|
$
209,299
|
2019
|
111,441
|
2020
|
61,509
|
2021
|
60,984
|
2022 and
thereafter
|
167,706
|
TOTAL
|
$
610,939
|
1.
|
I have reviewed this Annual Report on Form 10-K of FitLife Brands,
Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading
with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in
all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the
periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible
for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:
|
|
a.
|
Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during the
period in which this report is being prepared;
|
|
b.
|
Designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under
our supervision, to provide reasonable assur
ance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure
and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of
the end of the period covered by this report based on such
evaluations: and
|
|
d.
|
Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the
registrant's most recent fiscal quarter that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting;
and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed,
based on our most recent evaluation of internal control over
financial reporting, to the registrant's auditors and the audit
committee of the registrant's board of directors (or persons
performing the equivalent functions):
|
|
a.
|
All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information;
and
|
|
b.
|
Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.
|
Registrant
Date: April 17, 2018
|
|
FitLife Brands, Inc.
By: /s/ Dayton Judd
|
|
|
|
Dayton Judd
|
|
|
|
Interim Chief
Executive Officer
(Principal
Executive Officer)
|
|
1.
|
I have reviewed this Annual Report on Form 10-K of FitLife Brands,
Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading
with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in
all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the
periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible
for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:
|
|
a.
|
Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during the
period in which this report is being prepared;
|
|
b.
|
Designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally
accepted accounting principles;
|
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure
and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of
the end of the period covered by this report based on such
evaluations: and
|
|
d.
|
Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the
registrant's most recent fiscal quarter that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting;
and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed,
based on our most recent evaluation of internal control over
financial reporting, to the registrant's auditors and the audit
committee of the registrant's board of directors (or persons
performing the equivalent functions):
|
|
a.
|
All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information;
and
|
|
b.
|
Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.
|
Registrant
Date: April 17, 2018
|
|
FitLife Brands, Inc.
By: /s/ Michael Abrams
|
|
|
|
Michael Abrams
|
|
|
|
Chief Financial Officer and Director
(Principal Financial Officer)
|
|
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations
of the Company.
|
Registrant
Date: April 17, 2018
|
|
FitLife Brands, Inc.
By: /s/ Dayton Judd
|
|
|
|
Dayton
Judd
|
|
|
|
Interim Chief Executive Officer
(Principal Executive Officer)
|
|
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations
of the Company.
|
Registrant
Date: April 17, 2018
|
|
FitLife Brands, Inc.
By: /s/ Michael Abrams
|
|
|
|
Michael Abrams
|
|
|
|
Chief Financial Officer and Director
(Principal Financial Officer)
|
|