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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): MARCH 3, 2005
PACIFICHEALTH LABORATORIES, INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 000-23495 22-3367588
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification Number)
100 MATAWAN ROAD, SUITE 420, MATAWAN, NJ 07747-3913
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (732) 739-2900
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[_] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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ITEM 1.02 TERMINATION OF A MATERIAL DEFINITIVE AGREEMENT
ITEM 5.02 DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF PRINCIPAL OFFICERS
On March 3, 2005, Gregory Horn resigned as a director of PacificHealth
Laboratories, Inc. (the "Company").
On March 3, 2005, Mr. Horn also provided the required 30-day
notification to terminate the consulting agreement between Mr. Horn and the
Company dated October 25, 2004 relating to the provision by Mr. Horn of various
consulting services to the Company commencing on December 1, 2004 for monthly
compensation of $5,000 and reimbursement of pre-approved travel and other
expenses.
ITEM 2.06 MATERIAL IMPAIRMENTS
The Company has been informed by representatives of General Nutrition
Corporation ("GNC") that GNC will discontinue the Company's Nutrient Timing
System ("NTS") line of strength training products. These products were launched
in March 2004 under a Purchasing Agreement and were sold exclusively by GNC
through January 2005.
Sales of NTS products to GNC were approximately $824,000 in 2004 before taking
into account any potential returns as specified below. GNC has approximately
$54,000 of NTS inventory in its warehouses and distribution centers and
approximately $452,000 of inventory within its retail stores. The Company and
GNC have agreed to an aggressive discount program in the 2nd quarter of 2005 to
sell through as much of the retail inventory as possible. It is likely that the
Company will absorb a large portion of the discount. While the Purchasing
Agreement between the Company and GNC gives GNC the right to return product if
certain minimum sales are not met, the Company does not believe a significant
amount of inventory is subject to this right of return. Given the ongoing
significant business relationship between the Company and GNC, the Company may
accept returns of product from GNC after a period of special promotion and
discounting if other alternatives are not agreed to.
The Company will seek to market this line of products through alternate channels
such as gyms and specialty retailers as well as pursue potential licensing
agreements with other sports nutrition companies. However, given the uncertainty
of selling the product in other channels of distribution, the Company, as of
March 8, 2005, has determined that it is required to write off the value of its
own inventory of NTS products. The inventory of NTS products at December 31,
2004, was $679,000. The inventory of this product line at September 30, 2004,
included in the Company's balance sheet filed with its Quarterly Report on Form
10-QSB for the period ending September 30, 2004, was $556,000.
In addition, the Company has determined to write off the value of the patents it
holds for this line of product. At September 30, 2004, these patents were
$144,755 on the Company's balance sheet.
The Company does not believe that the impairment of its inventory or patents
will result in any future cash expenditures.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PACIFICHEALTH LABORATORIES, INC.
Dated: March 9, 2005 By: /s/ Stephen P. Kuchen
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Stephen P. Kuchen
Chief Financial Officer
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