IRVINE, Calif., July 8, 1999 (PRIMEZONE) -- Naturade, Inc. (OTC BB: NRDC) As reported previously, a civil judgment (the "Judgment") in the amount of $2,744,000 was entered in March, 1999 against Naturade by the United States Bankruptcy Court for the Northern District of Texas following a bench trial in a proceeding styled Jeffrey H. Mims, Chapter 7 Trustee v. Kennedy Capital, et al. The proceeding arose out of the bankruptcy case of Performance Nutrition, Inc. ("PNI"), on whose behalf the Trustee was acting.
Naturade and the PNI Trustee have entered into a settlement agreement, which is subject to approval by the Bankruptcy Court. On July 7, 1999, the PNI Trustee filed an application seeking Bankruptcy Court approval of the settlement agreement. If approved, the settlement agreement will provide Naturade with a full release of the Judgment and the costs and interest thereon, as well as any and all other claims which the Trustee has or might have against Naturade (including a preference claim for approximately $130,000 filed in January 1999 by the PNI Trustee against Naturade.) The settlement agreement requires Naturade to deliver to the Trustee (1) a cash payment of $1,350,000, (2) a promissory note in the amount of $424,000 amortized over 12 months at 5% interest, and (3) a contingent promissory note in the amount of $226,000, which will become payable only to the extent that Naturade's sales for the second, third and fourth quarters of 1999 exceed specified targets. The total cost to Naturade of the settlement is expected to range between $1,774,000 and $2,000,000, exclusive of interest on the promissory notes.
The Bankruptcy Court has scheduled a hearing on the Trustee's application to approve the settlement agreement for August 5, 1999. If the settlement agreement is approved, it is anticipated that the parties will consummate the terms of the settlement agreement before the end of August, 1999. Naturade has preserved its right to appeal the Judgment in the event that the Bankruptcy Court does not approve the settlement agreement.
Bill Stewart, Chief Executive Officer of Naturade, said "We are gratified to have reached this agreement and are now poised to close this chapter in Naturade's history. We believe this settlement is in the best interests of Naturade and we are hopeful that this matter will soon be behind us."
"Naturade's position in the marketplace is growing stronger. Our new products are making inroads in all of our channels and are gaining rapid acceptance by consumers. And, our core line of protein drinks remains strong in the market with N-R-G continuing as the premier protein drink in the nation."
Stewart continued, "Naturade's Chinese Way line of herbal remedies is showing increasing success in the marketplace and we continue to roll out new products in this line."
Naturade, Inc., founded in 1926, is a leading provider of low carbohydrate, high protein powders in the United States, with eight of the top selling ten brands, including the N-R-G(tm) brand, the nation's number one selling protein powder. In addition to protein powders, the company also distributes Kids' Plex(tm) nutritional powders and nutritional bars for children, The Chinese Way(tm) herbal remedies, and a complete line of high concentrate Aloe-Vera based skincare products using a base of a minimum 80 percent aloe vera extract.
NOTE:
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for certain forward-looking statements. The statements contained in this press release that are not historical facts are forward-looking statements based on the Company's current expectations and beliefs concerning future developments and their potential effects on the Company. There can be no assurance that future developments affecting the Company will be those anticipated by the Company. Actual results may differ from those projected in the forward-looking statements. These forward-looking statements involve significant risks and uncertainties (some of which are beyond the control of the Company) and are subject to change based upon various factors. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as the result of new information, future events or otherwise. For a more detailed discussion of some of the ongoing risks and uncertainties of the Company's business, see the Company's filings with the Securities and Exchange Commission.