HAUPPAUGE, N.Y., Sept 20, 2005 /PRNewswire via COMTEX/ -- IdeaSphere, Inc. (ISI), owner of the Twinlab, Nature's Herbs and Alvita Teas brands and Rebus Publishing, yesterday told a US Bankruptcy Court it has invoked its right to terminate the asset purchase agreement filed earlier this year to acquire certain assets of Metabolife International Inc., a maker of diet and nutritional supplements.
ISI signed an asset purchase agreement on July 1 to acquire assets of Metabolife, which is in Chapter 11 bankruptcy. However, the asset purchase agreement included provisions requiring Metabolife to operate the business in the ordinary course during the bankruptcy. ISI recently discovered that Metabolife did not meet its obligations under the agreement. Despite several good faith attempts to negotiate with Metabolife to restructure the agreement to reflect the current state of the business, Metabolife consistently refused to open any such discussions, and ISI invoked its contractual right to terminate the agreement.
Mark Fox, president of ISI, stated that ISI continues to be interested in acquiring the Metabolife assets if an accord can be reached on an appropriate valuation for those assets, which include the company's core non-ephedra brands: Metabolife Ultra, Metabolife Complete, Metabolife Ultra Caffeine Free and Metabolife Green Tea Formula.
"We made a premium bid for the Metabolife assets in July because we believed they could be integrated very efficiently into our existing structure and operations, and the products were a good fit for our brand portfolio," said Fox. "However, because Metabolife has not operated its business consistent with past practices as required by the agreement, we can no longer justify the original bid, as the value of those assets has diminished considerably over the past several months."
In correspondence to Metabolife, ISI outlined in detail some of the specific material changes to the Metabolife business that had forced their decision to terminate the agreement, including:
* As much as 30 percent of Metabolife inventory expired or was soon to
* The company lost sales with clients in the mass retail sector including
* Metabolife failed to sustain marketing and advertising to support
product sales, spending only $34,000 in July and August rather than the
$900,000 set forth in its projections.
Fox said ISI approached Metabolife in good faith to correct these deficiencies and protect the valuation of the assets, but the bankrupt company would not even discuss any changes, forcing ISI to invoke the termination clause in the agreement.
"We remain interested in acquiring these assets, and we plan to file a new offer to purchase the assets for $14 million, at a price that more accurately reflects the value of the assets today," said Fox.
IdeaSphere intends to continue to work in good faith with Metabolife to determine if an asset purchase can be consummated, but will also be moving forward through applicable bankruptcy court procedure to secure the return of its $2 million deposit if no agreement can be reached.
About IdeaSphere Inc.
IdeaSphere Inc. is a purpose-built, vertically integrated health and wellness company. It provides total wellness solutions through its entities, which include leaders in wellness products, content, and services. IdeaSphere's family of companies includes leaders in wellness products, content, and services. The family of companies includes Twinlab Corporation, Nature's Herbs and Alvita Teas, as well as Rebus Health Media, a leading consumer health and science content developer and publisher.