UNITED
STATES


SECURITIES AND EXCHANGE
COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-K





(X)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES


EXCHANGE
ACT OF 1934





For
the Fiscal Year Ended December 31, 2008


OR


(  )
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES


EXCHANGE
ACT OF 1934





For the
transition period from N/A to N/A


Commission
File Number:  0-25474






Bond
Laboratories, Inc.


(Name of
small business issuer as specified in its charter)






Nevada
            20-3464383State
      of Incorporation
            IRS
      Employer Identification No.





777
South Highway 101, Suite 215, Solana Beach, CA  92975


(Address
of principal executive offices)





(858) 847-9000


(Issuer’s
telephone number)





Securities
registered under Section 12(b) of the Exchange Act: None




Securities
registered under Section 12(g) of the Exchange Act:




Common
Stock, $0.01 par value per share


(Title
of Class)








Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.


oYesxNo




Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.


o Yes   
x No




Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.   x
Yes    o No




Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.  o




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of “accelerated
filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.
(Check one):




Large accelerated filer
            o
            
            Accelerated filer
            oNon-accelerated filer
            o
            
            Small
      Business Issuer
            x





Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act. Yes oNo x




The
aggregate market value of voting stock held by non-affiliates of the registrant
on December 31, 2008 was approximately $6,460,000. Solely for purposes of the
foregoing calculation, all of the registrant’s directors and officers as of
December 31, 2008, are deemed to be affiliates.This determination of
affiliate status for this purpose does not reflect a determination that any
persons are affiliates for any other purposes.





State the
number of shares outstanding of each of the issuer’s classes of equity
securities, as of the latest practicable date: As at March 27, 2009, there were
33,098,261 shares of Common Stock, $0.01 par value per share issued and
outstanding and 9,659,477 Series A preferred stock, $0.01 par value per share
and 125 Series B preferred stock.





Documents
Incorporated By Reference -None





Bond
Laboratories, Inc.


FORM
10-K ANNUAL REPORT


FOR
THE FISCAL YEAR ENDED DECEMBER 31, 2008


TABLE OF CONTENTS




PART IITEM 1.
                                  
                                  BUSINESS
                                  
                                  1ITEM 1A.
                                  
                                  RISK
      FACTORS
                                  
                                  5ITEM 1B.
                                  
                                  UNRESOLVED STAFF
      COMMENTS
                                  
                                  10ITEM 2.
                                  
                                  PROPERTIES
                                  
                                  10ITEM 3.
                                  
                                  LEGAL
      PROCEEDINGS
                                  
                                  11ITEM 4.
                                  
                                  SUBMISSION OF MATTERS TO A VOTE
      OF SECURITY HOLDERS
                                  
                                  11PART IIITEM 5.
                                  
                                  MARKET FOR REGISTRANT’S COMMON
      EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
      SECURITIES
                                  
                                  12ITEM 6.
                                  
                                  SELECTED FINANCIAL
      DATA
                                  
                                  15ITEM 7.
                                  
                                  MANAGEMENT’S DISCUSSION AND
      ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS
                                  
                                  16ITEM 7A.
                                  
                                  QUANTITATIVE AND QUALITATIVE
      DISCLOSURES ABOUT MARKET RISK
                                  
                                  20ITEM 8.
                                  
                                  CONSOLIDATED FINANCIAL STATEMENTS
      AND SUPPLEMENTARY DATA
                                  
                                  F-1ITEM 9.
                                  
                                  CHANGES IN AND DISAGREEMENTS WITH
      ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
    DISCLOSURE
                                  
                                  21ITEM 9A.
                                  
                                  CONTROLS AND
      PROCEDURES
                                  
                                  21ITEM 9B.
                                  
                                  OTHER
      INFORMATION
                                  
                                  22PART IIIITEM 10.
                                  
                                  DIRECTORS, EXECUTIVE
      OFFICERS, AND CORPORATE GOVERNANCE.
                                  
                                  23ITEM 11.
                                  
                                  EXECUTIVE
      COMPENSATION
                                  
                                  24ITEM 12.
                                  
                                  SECURITY OWNERSHIP OF CERTAIN
      BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
      MATTERS
                                  
                                  28ITEM 13.
                                  
                                  CERTAIN RELATIONSHIPS AND
      RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
                                  
                                  30ITEM 14.
                                  
                                  PRINCIPAL ACCOUNTANT FEES AND
      SERVICES
                                  
                                  30PART IVITEM 15.
                                  
                                  EXHIBITS AND FINANCIAL STATEMENT
      SCHEDULES
                                  
                                  31SIGNATURES
                                  
                                  32CERTIFICATIONSExhibit 31 – Management certificationExhibit 32 – Sarbanes-Oxley Act





-i-




Forward
Looking Statements — Cautionary Language




Certain
statements made in these documents and in other written or oral statements made
by Bond Laboratories, Inc. or on Bond Laboratories, Inc’s behalf are
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995 ("PSLRA"). A forward-looking statement is a
statement that is not a historical fact and, without limitation, includes any
statement that may predict, forecast, indicate or imply future results,
performance or achievements, and may contain words like: "believe",
"anticipate", "expect", "estimate", "project", "will", "shall" and other words
or phrases with similar meaning in connection with a discussion of future
operating or financial performance. In particular, these include statements
relating to future actions, trends in our businesses, prospective products,
future performance or financial results. Bond Laboratories, Inc. claims the
protection afforded by the safe harbor for forward-looking statements provided
by the PSLRA.  Forward-looking statements involve risks and
uncertainties that may cause actual results to differ materially from the
results contained in the forward-looking statements. Risks and uncertainties
that may cause actual results to vary materially, some of which are described in
this filing.  The risks included herein are not exhaustive. This
annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on
Form 8-K and other documents filed with the SEC include additional factors which
could impact Bond Laboratories, Inc.'s business and financial performance.
Moreover, Bond Laboratories, Inc. operates in a rapidly changing and competitive
environment. New risk factors emerge from time to time and it is not possible
for management to predict all such risk factors. Further, it is not possible to
assess the impact of all risk factors on Bond Laboratories, Inc's business or
the extent to which any factor, or combination of factors, may cause actual
results to differ materially from those contained in any forward-looking
statements. Given these risks and uncertainties, investors should not place
undue reliance on forward-looking statements as a prediction of actual results.
In addition, Bond Laboratories, Inc. disclaims any obligation to update any
forward-looking statements to reflect events or circumstances that occur after
the date of the report.




PARTI





ITEM1.  BUSINESS.





Except
for historical information contained herein, the following discussion contains
forward-looking statements that involve risks and uncertainties.  Such
forward-looking statements include, but are not limited to, statements regarding
future events and the Company’s plans and expectations.  Actual
results could differ materially from those discussed herein.  Factors
that could cause or contribute to such differences include, but are not limited
to, those discussed elsewhere in this Form 10-K or incorporated herein by
reference, including those set forth in Management’s Discussion and Analysis
or Plan of Operation.




As used
in this annual report, “we”, “us”, “our”, “Bond”, “Company” or “our company”
refers to Bond Laboratories, Inc. and all of its subsidiaries.





Overview





Bond
Laboratories brought together a veteran team of seasoned individuals with a
solid track record of converting ideas into highly profitable,
consumption-driven products. Bond’s goal is to be on the leading edge of
innovation.  Bond is now pursuing its unique vision for the next
generation of preventative health products; Healthy Beverages and
Foods.





Bond
Laboratories is set up to cater to all five of the major distribution channels;
focusing on the three most profitable categories of the industry- Energy, Pain
Relief and Sports Nutrition/Weight loss. Based upon our extensive research, we
strongly believe that our liquid energy product would make for an extremely
successful initial product offering to the public markets.





Fusion
Premium Energy, Inc.





Fusion
Premium Energy, Inc., “FPE”, (previously called Got Fusion Inc.)  was
incorporated in August of 2007.  FPE is a wholly owned subsidiary of
the Company and sells various “fusion” products.


-1-
 Table of Contents




John S.
Wilson is the President of the Fusion Premium Energy, Inc. and Scott Slocum is
the Executive Vice President of Fusion Premium Energy, Inc. John Wilson joins
Fusion Premium Energy, Inc. with over seventeen years of experience at both
Coca-Cola and Coca-Cola Enterprises. Most recently, Mr. Wilson was responsible
for negotiating exclusive bottling agreements with national customers on behalf
of all seventy-three of the Coca-Cola Bottlers in the United States. Scott
Slocum joins Fusion with over 24 years experience in the beverage industry
including numerous leadership roles within Coca-Cola Enterprises. Mr. Slocum’s
strength is his vast experience in the areas of channel distribution, customer
management, as well as operations logistics.





Initial
Target Market: Energy


Product:
Fusion 6+ Hour Energy Boost





According
to the Beverage Marketing Corporation (2007), the market for energy drinks in
2006 exceeded $2.5 billion, which represented a 516% gain from
2000.  (The category grew an additional 9% in 2008.)  New
product introductions have numbered in the hundreds, accounted for a significant
percentage of the sales growth.  The principal marketing channels in
2006 were convenience/gasoline stores (35.7%), mass merchandisers (16.5%), and
supermarkets (11.3%), with most of the growth occurring in mass merchandiser and
supermarket channels.





Energy
"Shots" have been particularly successful since their launch in 2004, rapidly
growing to 11.7% of total energy drink spending.  Benefits include
convenient portability (small size), less carbohydrates and sugar than
full-sized drinks, added vitamins and minerals, easy consumption of the small
volume of liquid (two ounces), and no need for
refrigeration.  Retailers enjoy the small footprint of the marketing
cubes, high margins, and rapid inventory turns.  The small footprint
allows retailers to merchandise the shots in high-impulse
locations.




The
significance of being one of the first brands to market cannot be
overlooked.  Energy Drinks began their popularity with products like
Red Bull in the late 1980’s.  Although there are over 600 energy
drinks on the market today, it is estimated that Red Bull sold over 5 Billion
units in 2007.  The concentrated 2 ounce energy shot drink began
approximately 3 years ago with about 30 brands in the category today; the first,
‘5 Hour Energy’ is expected to have had sales of well in excess of $100 million
for 2007.  Bond launched its Fusion 6+ Hour Energy Boost at the
National Association of Convenience Stores in November of 2007 where it was
voted Best Taste.





Fusion 6+ Hour Energy Boost
Product Features:





•
            3X
      the kick of the typical canned energy drink in a small 2oz.
      bottle!





•
            Metabolizes
      faster than canned energy
      drink





•
            Zero carbs, Zero
      grams of sugar, only 8 calories per
serving





•
            No
      crash- as associated with all sugar based energy
  drinks





•
            The
      strongest / longest lasting energy shot available on the
      market





•
              
              •
            Voted
      the #1 tasting energy shot in the category at the 2007 NACS
      Show!
              
              Available
      in Berry and Limon




-2-
 Table of Contents




Retailers
have found that the energy shot product category is #1 in both dollar sales at
the front-end checkout and in dollar sales per square inch of display
space.  The Fusion 6+Hour Energy Boost was first shipped to customers
in January of 2008 and was No.7 in the category by the end of its first year on
the market.  (Source: A.C. Nielsen, Nov 2008).  A 6-piece
counter display for Fusion® is 12.75 square inches, and a 12-piece counter
display is 25.9 square inches).  Fusion® also has an attractive gross
profit for the retailer.  With a regular wholesale price of $1.40 per
unit and a suggested retail price of $2.99, the retailer's gross profit is
49.8%.




NDS
Nutritional Products, Inc.




In
October 1, 2008 we purchased the entire interest of NDS Nutritional Products,
Inc. (“NDS” or “NDS Nutritional Products, Inc”)   NDS Nutritional
Products, Inc. was formed in 2001.  NDS Nutritional Products, Inc is a
wholesaler and distributor of nutritional products focusing on Weight Loss,
Sports Nutrition and General Health. Falling under NDS Nutritional Products, Inc
are the Release Weight Loss line sold exclusively to GNC, the Professional
Muscular Development line sold exclusively to GNC, the Dr. Health line sold
exclusively to GNC, and the Infinite Labs product line sold through Distributors
and large retailers in the United States, Canada, and Europe.




NDS
Nutritional Products has a strong history and brings tremendous resources to our
organization. Established in 1998, NDS focuses its dynamic capabilities on
providing cutting-edge quality products in the weight loss, sports nutrition and
general health categories. Its emphasis is placed on the education of the
consumer in regards to the unique attributes of its diverse product line. Its
strength is in the health and nutrition channel, which will nicely complement
our current, rapidly growing retail distribution network in convenience stores
and mass.




NDS
Nutritional Products, Inc.  is the first of what management believes
will be numerous acquisitions that will help us accomplish that goal. NDS is
strategically involved with the development of the next generation of
preventative health products, Fortified Foods and Beverages. Management believes
NDS is an appropriate fit for our company as we .anticipate, but cannot
guarantee, will immediately add significant revenue to our top line and be
accretive to our earnings next year. We have already begun to integrate NDS
distribution in the health and the nutrition channel alongside our rapidly
growing retail distribution network in convenience stores (C-stores). Not only
will the NDS acquisition allow us to add 40 additional SKUs in the fast growing
sports nutrition market for our International broker network, we have gained a
centralized infrastructure in Omaha, NE.





Competition





Management
anticipates that we will encounter competition in each market that we
enter.  Patent and Trademark applications that cover new embodiments
of technology will be pursued wherever possible.  While we cannot
assure that the patents and applications will block competitive products, they
should help us become a significant participant in the marketplace. -3-
 Table of Contents





The
industry leader is Red Bull with annual sales of approximately $5
billion.  The other leaders in the category include Monster,
(manufactured and distributed by Hanson Beverages), Rock Star, (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).    To managements’ knowledge and observation, almost
all energy products are sold in 8 – 24 ounce cans.  As of the end of
2007, there were more than 600 brands in the energy can drink business, with
close to 200 going out of business that year and 200 new entries to take their
place.  Fusion is sold in a 2 ounce shot with the same ‘kick’ as a 24
ounce energy drink.  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 bottle, vs. several cans, (which must stay cold),
but cans use science and technology from over ten years ago.  Where
the energy can market is dominated by major brands with sales exceeding $500 mm
- $5 billion, the shot market only has approximately 30 brands, of which only
one, 5 Hour Energy, has sales exceeding $100 mm.  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 carbonated beverage products and that the longer they stay in
contact with liquid, the less potent they become.





Marketing
Program





The
Company has worked hard to establish a ‘Premium’ Brand
image.  Consistent with this has been the sponsorship of elite
athletes who have achieved champion status in their individual
specialties.





2008 -
L&M Racing: Competing in Supercross Motorcycle racing, L&M has two
racers, Chad Reed and Nathan Ramsey.  For the 2008 season, Chad Reed
was the world champion winning 11 of 18 races.  Nathan Ramsey placed
6th
place overall.  The Fusion logo was prominently displayed on jerseys,
motorcycles, the team rig and hats as well as the water bottle held on the
podium.  Races were broadcast on Speed TV and CBS.





2008 –
Tara Dakides: Tara is recognized as the most accomplished female snowboarder
ever.  She competes in numerous events every year including the Winter
X games which is broadcast on national television.  In addition,
during the warmer months, Tara competes on the only all women Baja 1000 team and
CORR, (Champion Off Road Racing), seen on Speed TV and NBC.  The
Fusion logo was prominently displayed on jerseys, her snowboard, the team rig,
hats and cars as well as the water bottle held on the podium.





2008 –
Steve McCann: Steve is a worldwide recognized BMX rider who competes in the Dew
Tour, the X Games, the US Open and several other events that are picked up by
national broadcasters.  He is the 1st athlete
in history to make the finals in every BMX specialty on the Dew Tour,
ever.  The Fusion logo was prominently displayed on the helmet as well
as the water bottle held on the podium.





2008 -
Darrell Lanigan: Amazing Consistency Propelled Darrell Lanigan To First Career
World of Outlaws Late Model Series Championship In 2008.  Lanigan’s
sparkling ’08 stats show two wins, 25 top-five and 36 top-10 finishes in 43
A-Mains, plus one fast time honor and 17 heat-race wins. He led 168 laps and
completed 2,254 of a possible 2,285 laps, with only three of the 31 laps he
missed coming in full-points races. -4-
 Table of Contents





2008-2009
– Jason Ellis: Skate, MMA, Drift car and Radio personality.  Jason
competes at several events throughout the year in his various disciplines, but
his greatest value to the Company comes as a radio personality on Sirius
Satellite radio where he can be heard Monday-Friday for 3 hours per day focusing
on Action Sports and the athletes who compete in them.  His estimate
audience is 500K – 1 million listeners per day.





2008 –
“Ruthless” Robbie Lawler: Mixed Martial Arts, (MMA).  Robbie is the
Elite XC Middleweight Champion having won his most recent match against Scott
Smith on CBS Saturday night fights, broadcast on July 26th
nationwide.  The Fusion logo was prominently displayed on the middle
of his shorts where it could be seen for a good portion of the
fight.





Revenues





Revenue
from product sales is recognized upon shipment to customers at which time such
customers are invoiced.  Units are shipped under the terms of FOB
shipping point when determination is made that collectibility is
probable.  Revenues for services are recognized upon completion of the
services.  For consulting services and other fee-for-service
arrangements, revenue is recognized upon completion of the
services.  Our company has adopted the Securities and Exchange
Commission’s Staff Accounting Bulletin (SAB) No. 104, which provides guidance on
the recognition, presentation and disclosure of revenue in financial
statements.





Employees





As of
fiscal year end December 31, 2008 the Company had 23 employees. We believe
relations with employees are generally good.





WHERE YOU CAN FIND MORE
INFORMATION





You are
advised to read this Form 10-K in conjunction with other reports and documents
that we file from time to time with the SEC. In particular, please read our
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K that we file from
time to time. You may obtain copies of these reports directly from us or from
the SEC at the SEC’s Public Reference Room at 100 F. Street, N.E. Washington,
D.C. 20549, and you may obtain information about obtaining access to the
Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC
maintains information for electronic filers at its website
http://www.sec.gov.





ITEM1A - Risk Factors




An investment in our common stock
involves a high degree of risk. You should carefully consider the following
information about these risks, together with the other information contained in
this Annual Report on Form 10-K, before investing in our common stock. If any of
the events anticipated by the risks described below occur, our results of
operations and financial condition could be adversely affected which could
result in a decline in the market price of our common stock, causing you to lose
all or part of your investment.We have updated the risk factors
previously disclosed in our registration statement on Form SB-2, filed November
22, 2006 (the “Form SB-2”) and in our Annual Report on Form 10–K for the year
ended December 31, 2007, which was  filed with the Securities and
Exchange Commission on March 28, 2008 (the “Fiscal 2007 10–K”). We believe there
are no changes that constitute material changes from the risk factors previously
disclosed in the Fiscal 2007 10–K and the Form SB-2 except as disclosed
below.


-5-
 Table of Contents





The
Liquidity Of Our Common Stock Is Seriously Limited And There Is A Limited Market
For Our Common Stock





Our stock
is currently being traded on the NASDAQ Over-The-Counter Bulletin Board, and the
liquidity of our common stock is limited. The Bulletin Board is a limited market
and subject to substantial restrictions and limitations in comparison to the
NASDAQ system. Any broker/dealer that makes a market in our stock or other
person that buys or sells our stock could have a significant influence over its
price at any given time.





We
Depend Upon Key Management Personnel and the Loss of Any of Them Would Seriously
Disrupt Our Operations:





The
success of our company is largely dependent on the personal efforts of Scott
Landow, Ryan Zink, John Wilson and other key executives. The loss of the
services of Scott Landow, Ryan Zink, John Wilson or other key executives would
have a material adverse effect on our business and prospects. In addition, in
order for us to undertake our operations as contemplated, it will be necessary
for us to locate and hire experienced personnel who are knowledgeable in the
Nutraceutical Dietary Supplement business. Our failure to attract and
retain such experienced personnel on acceptable terms will have a material
adverse impact on our ability to grow our business.





The
nutritional supplements industry is intensely competitive. We have many
well-established competitors with substantially greater financial and other
resources than it. These factors may make it more difficult for us to
successfully implement its business plan and may adversely affect its results of
operations.





The
nutritional supplements industry is a large, highly fragmented and growing
industry, with, to management’s knowledge, no single industry participant
accounting for more than 10% of total industry retail sales. Participants
include specialty retailers, supermarkets, drugstores, mass merchants
(wholesalers), multi-level marketing organizations, mail order companies and a
variety of other smaller participants. The market is also highly sensitive to
the introduction of new products, including various prescription drugs, which
may rapidly capture a significant share of the market. Increased competition
from companies that distribute through retail or wholesale channels could have a
material adverse effect on our financial condition and results of operations. We
are a development stage business and the only revenues we have received from
product sales since inception were nominal. Accordingly, we have not been
operational long enough to experience any of the above problems. However, since
we are a development stage business, most, if not all companies in our industry
have greater financial and other resources available to them and possess
manufacturing, distribution and marketing capabilities greater than ours. In
addition, our competitors may be more effective and efficient in integrating new
products. We may not be able to compete effectively and any of the factors
listed above may cause price reductions, reduced margins and difficulties in
gaining market share.





Our
Common Stock Is Subject To Penny Stock Regulation





Our
shares are subject to the provisions of Section 15(g) and Rule 15g-9 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), commonly
referred to as the "penny stock" rule. Section 15(g) sets forth certain
requirements for transactions in penny stocks and Rule 15g-9(d)(1) incorporates
the definition of penny stock as that used in Rule 3a51-1 of the Exchange Act.
The Commission generally defines penny stock to be any equity security that has
a market price less than $5.00 per share, subject to certain exceptions. Rule
3a51-1 provides that any equity security is considered to be penny stock unless
that security is: registered and traded on a national securities exchange
meeting specified criteria set by the Commission; authorized for quotation on
the NASDAQ Stock Market; issued by a registered investment company; excluded
from the definition on the basis of price (at least $5.00 per share) or the
registrant's net tangible assets; or exempted from the definition by the
Commission. Since our shares are deemed to be "penny stock", trading in the
shares will be subject to additional sales practice requirements on
broker/dealers who sell penny stock to persons other than established customers
and accredited investors. -6-
 Table of Contents




We
Do Not Intend To Pay Dividends.




We do not
anticipate paying cash dividends on our common stock in the foreseeable future.
We may not have sufficient 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. The declaration, payment and amount of any
future dividends will be made at the discretion of the board of directors, and
will depend upon, among other things, the results of our operations, cash flows
and financial condition, operating and capital requirements, and other factors
our board of directors may consider relevant. There is no assurance that we will
pay any dividends in the future, and, if dividends are rapid, there is no
assurance with respect to the amount of any such dividend.




Because
We Are Quoted On The OTCBB Instead Of An Exchange Or National Quotation System,
Our Investors May Have A Tougher Time Selling Their Stock Or Experience Negative
Volatility On The Market Price Of Our Stock.




Our
common stock is traded on the OTCBB. The OTCBB is often highly illiquid, in part
because it does not have a national quotation system by which potential
investors can follow the market price of shares except through information
received and generated by a limited number of broker-dealers that make markets
in particular stocks. There is a greater chance of volatility for securities
that trade on the OTCBB as compared to a national exchange or quotation system.
This volatility may be caused by a variety of factors, including the lack of
readily available price quotations, the absence of consistent administrative
supervision of bid and ask quotations, lower trading volume, and market
conditions. Investors in our common stock may experience high fluctuations in
the market price and volume of the trading market for our securities. These
fluctuations, when they occur, have a negative effect on the market price for
our securities. Accordingly, our stockholders may not be able to realize a fair
price from their shares when they determine to sell them or may have to hold
them for a substantial period of time until the market for our common stock
improves.




Failure
To Achieve And Maintain Effective Internal Controls In Accordance
With Section 404 Of The Sarbanes-Oxley Act Could Have A Material
Adverse Effect On Our Business And Operating Results.




It may be
time consuming, difficult and costly for us to develop and implement the
additional internal controls, processes and reporting procedures required by the
Sarbanes-Oxley Act. We may need to hire additional financial reporting, internal
auditing and other finance staff in order to develop and implement appropriate
additional internal controls, processes and reporting procedures. If we are
unable to comply with these requirements of the Sarbanes-Oxley Act, we may not
be able to obtain the independent accountant certifications that the
Sarbanes-Oxley Act requires of publicly traded companies.




If we
fail to comply in a timely manner with the requirements of Section 404 of
the Sarbanes-Oxley Act regarding internal control over financial reporting or to
remedy any material weaknesses in our internal controls that we may identify,
such failure could result in material misstatements in our financial statements,
cause investors to lose confidence in our reported financial information and
have a negative effect on the trading price of our common stock.




Pursuant
to Section 404 of the Sarbanes-Oxley Act and current SEC regulations,
beginning with our annual report on Form 10-K for our fiscal period ending
December 31, 2007, we will be required to prepare assessments regarding
internal controls over financial reporting and beginning with our annual report
on Form 10-K for our fiscal period ending December 31, 2008, furnish a
report by our management on our internal control over financial reporting. We
have begun the process of documenting and testing our internal control
procedures in order to satisfy these requirements, which is likely to result in
increased general and administrative expenses and may shift management time and
attention from revenue-generating activities to compliance activities. While our
management is expending significant resources in an effort to complete this
important project, there can be no assurance that we will be able to achieve our
objective on a timely basis. There also can be no assurance that our auditors
will be able to issue an unqualified opinion on management’s assessment of the
effectiveness of our internal control over financial reporting. Failure to
achieve and maintain an effective internal control environment or complete our
Section 404 certifications could have a material adverse effect on our
stock price. -7-
 Table of Contents




In
addition, in connection with our on-going assessment of the effectiveness of our
internal control over financial reporting, we may discover “material weaknesses”
in our internal controls as defined in standards established by the Public
Company Accounting Oversight Board, or the PCAOB. A material weakness is a
significant deficiency, or combination of significant deficiencies, that results
in more than a remote likelihood that a material misstatement of the annual or
interim financial statements will not be prevented or detected. The PCAOB
defines “significant deficiency” as a deficiency that results in more
than a remote likelihood that a misstatement of the financial statements
that is more than inconsequential will not be prevented or
detected.




In the
event that a material weakness is identified, we will employ qualified personnel
and adopt and implement policies and procedures to address any material
weaknesses that we identify. However, the process of designing and implementing
effective internal controls is a continuous effort that requires us to
anticipate and react to changes in our business and the economic and regulatory
environments and to expend significant resources to maintain a system of
internal controls that is adequate to satisfy our reporting obligations as a
public company. We cannot assure you that the measures we will take will
remediate any material weaknesses that we may identify or that we will implement
and maintain adequate controls over our financial process and reporting in the
future.




Any
failure to complete our assessment of our internal control over financial
reporting, to remediate any material weaknesses that we may identify or to
implement new or improved controls, or difficulties encountered in their
implementation, could harm our operating results, cause us to fail to meet our
reporting obligations or result in material misstatements in our financial
statements. Any such failure could also adversely affect the results of the
periodic management evaluations of our internal controls and, in the case of a
failure to remediate any material weaknesses that we may identify, would
adversely affect the annual auditor attestation reports regarding the
effectiveness of our internal control over financial reporting that are required
under Section 404 of the Sarbanes-Oxley Act. Inadequate internal controls
could also cause investors to lose confidence in our reported financial
information, which could have a negative effect on the trading price of our
common stock.




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.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.


-8-
 Table of Contents




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.
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.




Risks
regarding Forward-Looking Statements




This
Annual Report 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 Annual Report
include or relate to, among other things, (a)  our growth strategies,
(b) anticipated trends in our industry, (c) our ability to obtain and
retain sufficient capital for future operations, and (d) our anticipated
needs for working capital. These statements may be found under “Management’s
Discussion and Analysis or Plan of Operations” and “Business,” as well as in
this Annual Report generally. Actual events or results may differ materially
from those discussed in forward-looking statements as a result of various
factors, including, without limitation, the risks outlined under “Risk Factors”
and matters described in this Annual Report generally. In light of these risks
and uncertainties, there can be no assurance that the forward-looking statements
contained in this Annual Report will in fact occur.


-9-
 Table of Contents




The
forward-looking statements herein are based on current expectations that involve
a number of risks and uncertainties. Such forward-looking statements are based
on assumptions described herein. The assumptions are based on judgments with
respect to, among other things, future economic, competitive and market
conditions, and future business decisions, all of which are difficult or
impossible to predict accurately and many of which are beyond our control.
Accordingly, although we believe that the assumptions underlying the
forward-looking statements are reasonable, any such assumption could prove to be
inaccurate and therefore there can be no assurance that the results contemplated
in forward-looking statements will be realized. In addition, as disclosed
elsewhere in the “Risk Factors” section of this annual report, there are a
number of other risks inherent in our business and operations which could cause
our operating results to vary markedly and adversely from prior results or the
results contemplated by the forward-looking statements. Management decisions,
including budgeting, are subjective in many respects and periodic revisions must
be made to reflect actual conditions and business developments, the impact of
which may cause us to alter marketing, capital investment and other
expenditures, which may also materially adversely affect our results of
operations. In light of significant uncertainties inherent in the
forward-looking information included in this annual report, the inclusion of
such information should not be regarded as a representation by us or any other
person that our objectives or plans will be achieved.




Some of
the information in this annual report contains forward-looking statements that
involve substantial risks and uncertainties. Any statement in this annual report
and in the documents incorporated by reference into this annual report that is
not a statement of an historical fact constitutes a “forward-looking statement”.
Further, when we use the words “may”, “expect”, “anticipate”, “plan”, “believe”,
“seek”, “estimate”, “internal”, and similar words, we intend to identify
statements and expressions that may be forward- looking statements. We believe
it is important to communicate certain of our expectations to our investors.
Forward-looking statements are not guarantees of future performance. They
involve risks, uncertainties and assumptions that could cause our future results
to differ materially from those expressed in any forward-looking statements.
Many factors are beyond our ability to control or predict. You are accordingly
cautioned not to place undue reliance on such forward-looking statements.
Important factors that may cause our actual results to differ from such
forward-looking statements include, but are not limited to, the risk factors
discussed herein.




ITEM1B.  UNRESOLVED STAFF COMMENTS





Not
applicable.





ITEM2.  PROPERTIES.


As of
fiscal year end December 31, 2008 the Company operates as a company
headquartered in Omaha NE.  On May 17, 2006, the Company signed a one
year lease to rent space for $1,770 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
$1,968 per month beginning September 1, 2006 and has since
expired.  Upon the completion of the Asset Purchase Agreement the
Company entered into a one year lease at a monthly rate of $3,876. This facility
was subsequently sublet when the Company changed its distribution model to using
a fulfillment house that could not only warehouse product, but pull all orders
and facilitate all shipping.   In January, we moved all of the
Bond and Fusion back office functions to Omaha, to take advantage to the
experienced personnel that we gained through the acquisition of
NDS.  All corporate functions are now handled in that
facility.  Subsequently, we closed the Huntington Beach office and are
in the process of securing a sub-let tenant for the remaining 12 months of the
lease.


Solana
      Beach
                    
                    
                    Huntington
      Beach
                    
                    
                    Omaha
                    
                    
                    Total2007
                    
                    $
                    1,860
                    
                    
                    $
                    2,875
                    
                    
                    $
                    3876
                    
                    
                    $
                    8,5212008
                    
                    $
                    1,860
                    
                    
                    $
                    2,875
                    
                    
                    $
                    3,876
                    
                    
                    $
                    8,521




-10-
 Table of Contents


ITEM
3.  LEGAL PROCEEDINGS




We are
currently not involved in any litigation that we believe could have a materially
adverse effect on our financial condition or results of operations. There is no
action, suit, proceeding, inquiry or investigation before or by any court,
public board, government agency, self-regulatory organization or body pending
or, to the knowledge of the executive officers of our company or any of our
subsidiaries, threatened against or affecting our company, our common stock, any
of our subsidiaries or of our company’s or our company’s subsidiaries’ officers
or directors in their capacities as such, in which an adverse decision could
have a material adverse effect.





ITEM4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS.





The
Company submitted no matters to a vote of its security holders during the fiscal
year ended December 31, 2008.


-11-
 Table of Contents


PART
II





ITEM
5.MARKET FOR REGISTANT’S COMMON STOCK, RELATED
STOCKHOLDER MATTERS AND ISSUERS PURCHASES OF EQUITY SECURITIES.





Bond
common stock is traded in the over-the-counter market, and quoted in the
National Association of Securities Dealers Inter-dealer Quotation System
(“Electronic Bulletin Board) and can be accessed on the Internet at www.otcbb.com under
the symbol “BNLB.OB.”





At
December 31, 2008, there were 25,839,928 shares of common stock of Bond
outstanding and there were approximately 261 shareholders of record of the
Company’s common stock.





The
following table sets forth for the periods indicated the high and low bid
quotations for Bond’s common stock.  These quotations represent
inter-dealer quotations, without adjustment for retail markup, markdown or
commission and may not represent actual transactions.





Periods
                      
                      High
                      
                      
                      LowFiscal
      Year 2008First
      Quarter (January – March 2008)
                      
                      $
                      1.50
                      
                      
                      $
                      1.50Second
      Quarter (April – June 2008)
                      
                      $
                      .92
                      
                      
                      $
                      .91Third
      Quarter (July – September 2008)
                      
                      $
                      .95
                      
                      
                      $
                      .55Fourth
      Quarter (October – December 2008)
                      
                      $
                      .62
                      
                      
                      $
                      .21Fiscal
      Year 2007First
      Quarter (January – March 2007)
                      
                      $
                      00.
                      
                      
                      $
                      .
      00Second
      Quarter (April – June 2007)
                      
                      $
                      .
      00
                      
                      
                      $
                      .
      00Third
      Quarter (July – September 2007)
                      
                      $
                      1.75
                      
                      
                      $
                      3.00Fourth
      Quarter (October – December 2007)
                      
                      $
                      3.25
                      
                      
                      $
                      3.00
  On March
25, 2009, the closing bid price of our common stock was
$.18.





Dividends





We may
never pay any dividends to our shareholders. We did not declare any dividends
for the year ended December 31, 2008. Our Board of Directors does not
intend to distribute dividends in the near future. The declaration, payment and
amount of any future dividends will be made at the discretion of the Board of
Directors, and will depend upon, among other things, the results of our
operations, cash flows and financial condition, operating and capital
requirements, and other factors as the Board of Directors considers relevant.
There is no assurance that future dividends will be paid, and if dividends are
paid, there is no assurance with respect to the amount of any such
dividend.





Transfer
Agent





Bond’s
Transfer Agent and Registrar for the common stock is Corporate Stock Transfer
located in Salt Lake City, Utah.


-12-
 Table of Contents





Recent
sales of unregistered securities


Years
      Ended
                    
                    Stock
      issued for Cash
                    
                    
                    Cash
      Received
                    
                    
                    Stock
      for Conversion of Debt
                    
                    
                    Stock
      issued for Stock Split
                    
                    
                    Stock
      issued and cancelled for servicesDecember
      31, 2007
                    
                    
                    2,014,000
                    
                    
                    $
                    1,651,000
                    
                    
                    
                    1,878,600
                    
                    
                    
                    9,067,225
                    
                    
                    
                    2,517,625December
      31, 2008
                    
                    
                    4,301,933
                    
                    
                    $
                    4,157,477
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    1,766,022





2007





During
the year ended December 31, 2007, the Company has issued shares of its common
stock as consideration to consultants for the fair value of the services
rendered.  The value of those shares is determined based on the
trading value of the stock at the dates on which the agreements were into for
the services and the value of services rendered.   During the
year ended December 31, 2007, the Company granted to consultants, 2,517,625
shares of common stock valued in the aggregate at $3,109,477 with a strike price
of par value since the Company was not trading its common stock.  The
stock issued for services includes $3,109,477 of the compensation for services
rendered in accordance with the consultant respective agreements.  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. 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.





During
the year ended December 31, 2007, the Company issued 2,014,000 shares of its
common stock for $1,651,000.  The shares were issued to third parties
in a private placement of the Company’s common stock.  The shares were
sold throughout the year ended December 31, 2007, at $.82 through $1.00 per
share at the end of the year when the shares were sold. 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.





During
year ended December 31, 2007, the Company issued 1,238,600 shares of its common
stock for the conversion of debt in the amount of $815,000 plus accrued interest
of $24,313 with the total conversion of $839,313.  The Company issued
230,000 common shares for the conversion of debt from the accrued salary of the
Company’s CEO of $230,000.  Also the Company issued 410,000 common
shares for the conversion of affiliate debt of $119,606.  All of these
conversions were non-cash transactions as reflected in the statement of Cash
Flow.  The Company issued 1,238,600 in warrants in connection with
this conversion of debt.


-13-
 Table of Contents




2008





During the year ended
December 31, 2008, the Company issued 3,642,456 shares of its common stock for
$3,498,000.  Included in the 3,642,456 of shares issued the Companyissued separately 3,000,000 of its shares in a private placement
memorandum that funded the Company on June 26, 2008.  The Company had
cost of raising capital of $250,713 that was paid to brokers and
attorneys.  The Company issued 1,800,000 warrants as the cost of
raising capital that had a strike price of $1.25.  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.





During
the year ended December 31, 2008, the Company has issued shares of its common
stock as consideration to consultants for the fair value of the services
rendered.  The value of those shares is determined based on the
trading value of the stock at the dates on which the agreements were into for
the services and the value of services rendered.   During the
year ended December 31, 2008, the Company granted to consultants, 1,340,522
shares of common stock valued in the aggregate at $1,531,793 with a strike price
of par value since the Company was not trading its common stock.  The
Company cancelled 1,124,500 common shares from consultants that surrendered
their shares to the Company.  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. 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.





During
the year ended December 31, 2008, the Company has issued 1,550,000 shares of its
common stock as consideration in the Asset Purchase Agreement between the
Company and NDS Nutritional Products, Inc. for the fair value of
790,500.  The value of those shares is determined based on the trading
value of the stock at the dates on which the agreements were into for the
services and the value of services rendered.   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. 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.





During the year ended
December 31, 2008, the Company issued 659,477 Preferred A shares for
$659,477.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.


-14-
 Table of Contents




Subscribed
Common and Preferred Stock




The
Company issued Preferred A shares of 4,000,000 at a $.15 value at the date of
issuance.  The Preferred A shares were issued to consultants for services
rendered for the company.




The
Company issued Preferred B shares of 125 shares at a $10,000 per share
value.  These preferred shares are cumulative and perpetual preferred
shares.  Along with the Preferrede B shares the Company issued 7,500,000
common shares in the same transactions.  The Company issued these
subscribed shares for $1,250,000 in cash.  We allocated the price of these
shares between Preferred B of a value of $208 and Common Stock as
$1,249,742.




The
Company has not issued any options but has issued warrants.  These
warrants have a 5 year life and can be exercised at the option of the
holder.


Date
      issued
                
                WarrantsIssued
                
                
                StrikePrice
                
                DateExpiredJanuary
      31, 2008
                
                
                1,875,000
                
                
                
                1.50
                
                January
      31, 2013June
      30, 2008
                
                
                1,952,359
                
                
                
                1.25
                
                June
      30, 2013June
      30, 2008
                
                
                634,516
                
                
                
                1.10
                
                June
      30, 2013December
      31, 2008
                
                
                1,900,000
                
                
                
                0.375
                
                December
      31, 2013Total
      Warrants Issued
                
                
                6,361,875





Stock
Splits





Share
data in this report have been adjusted to reflect the following stock splits
relating to the Company's common stock: December 7, 2007 the board of directors
authorized a 2-for-1 forward split.  The Company declared the 2 for 1
forward split was distributed on January 8, 2008.  This forward split
is reflected in the statement of shareholder’s equity for December 31, 2007 as
an increase in common stock of 9,067,225.





ITEM6.  SELECTED FINANCIAL DATA.





The
following information has been summarized from financial information included
elsewhere and should be read in conjunction with such financial statements and
notes thereto. -15-
 Table of Contents


Summary
of Statements of Operations of BNLB


Year Ended December
31, 2008 and 2007


December
      31,2008
                      
                      
                      2007Revenues
                      
                      $
                      2,530,424
                      
                      
                      $
                      11,531Cost
      of Deliverables
                      
                      
                      (1,617,503
                      )
                      
                      
                      (7,845
                      )Operating
      and Other Expenses
                      
                      
                      (7,538,912
                      )
                      
                      
                      (3,965,287
                      )Net
      Loss
                      
                      $
                      (6,625,991
                      )
                      
                      $
                      (3,961,601
                      )Balance
      Sheet Data:
                      
                      December
      31,2008
                      
                      
                      2007Current
      Assets
                      
                      $
                      2,956,791
                      
                      
                      $
                      1,219,556Total
      Assets
                      
                      
                      5,361,707
                      
                      
                      
                      1,314,960Current
      Liabilities
                      
                      
                      2,175,194
                      
                      
                      
                      30,253Non
      Current Liabilities
                      
                      
                      118,102
                      
                      
                      
                      -Total
      Liabilities
                      
                      
                      2,293,296
                      
                      
                      
                      30,253Working
      Capital (Deficit)
                      
                      
                      781,597
                      
                      
                      
                      1,189,303Shareholders'Equity
      (Deficit)
                      
                      $
                      3,068,411
                      
                      
                      $
                      1,284,707




ITEM7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OR PLAN OF OPERATION.





The
following is management’s discussion and analysis of certain significant factors
that have affected our financial position and operating results during the
periods included in the accompanying consolidated financial statements, as well
as information relating to the plans of our current management. This report
includes forward-looking statements. Generally, the words “believes,”
“anticipates,” “may,” “will,” “should,” “expect,” “intend,” “estimate,”
“continue,” and similar expressions or the negative thereof or comparable
terminology are intended to identify forward-looking statements. Such statements
are subject to certain risks and uncertainties, including the matters set forth
in this report or other reports or documents we file with the Securities and
Exchange Commission from time to time, which could cause actual results or
outcomes to differ materially from those projected. Undue reliance should not be
placed on these forward-looking statements which speak only as of the date
hereof. We undertake no obligation to update these forward-looking
statements.





The
following discussion and analysis should be read in conjunction with our
consolidated financial statements and the related notes thereto and other
financial information contained elsewhere in this Form 10-K.





Critical
Accounting Policies





We
prepare our consolidated financial statements in accordance with accounting
principles generally accepted in the United States of America. The preparation
of these financial statements requires the use of estimates and assumptions that
affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amount of revenues and expenses during the reporting period. Our
management periodically evaluates the estimates and judgments made. Management
bases its estimates and judgments on historical experience and on various
factors that are believed to be reasonable under the circumstances. Actual
results may differ from these estimates as a result of different assumptions or
conditions.





The
following critical accounting policies affect the more significant judgments and
estimates used in the preparation of the Company’s consolidated financial
statements. -16-
 Table of Contents





Revenue
Recognition





Revenue
from product sales is recognized upon shipment to customers at which time such
customers are invoiced.  Units are shipped under the terms of FOB
shipping point when determination is made that collectibility is
probable.  Revenues for services are recognized upon completion of the
services.  For consulting services and other fee-for-service
arrangements, revenue is recognized upon completion of the
services.  The Company has adopted the Securities and Exchange
Commission’s Staff Accounting Bulletin (SAB) No. 104, which provides guidance on
the recognition, presentation and disclosure of revenue in financial
statements.





Reclassifications




Certain
prior year amounts have been reclassified to conform to the current period
presentation for comparative purposes.




Stock
Based Compensation





In
December 2004, the FASB issued a revision of SFAS No. 123 ("SFAS No. 123(R)")
that requires compensation costs related to share-based payment transactions to
be recognized in the statement of operations. With limited exceptions, the
amount of compensation cost will be measured based on the grant-date fair value
of the equity or liability instruments issued. In addition, liability awards
will be re-measured each reporting period. Compensation cost will be recognized
over the period that an employee provides service in exchange for the award.
SFAS No. 123(R) replaces SFAS No. 123 and is effective as of the beginning of
January 1, 2006. Based on the number of shares and awards outstanding as of
December 31, 2005 (and without giving effect to any awards which may be granted
in 2006), we do not expect our adoption of SFAS No. 123(R) in January 2006 to
have a material impact on the financial statements.




FSP FAS
123(R)-5 was issued on October 10, 2006. The FSP provides that instruments that
were originally issued as employee compensation and then modified, and that
modification is made to the terms of the instrument solely to reflect an equity
restructuring that occurs when the holders are no longer employees, then no
change in the recognition or the measurement (due to a change in classification)
of those instruments will result if both of the following conditions are met:
(a). There is no increase in fair value of the award (or the ratio of intrinsic
value to the exercise price of the award is preserved, that is, the holder is
made whole), or the antidilution provision is not added to the terms of the
award in contemplation of an equity restructuring; and (b). All holders of the
same class of equity instruments (for example, stock options) are treated in the
same manner. The provisions in this FSP shall be applied in the first reporting
period beginning after the date the FSP is posted to the FASB website. The
Company has adopted SP FAS 123(R)-5 but it did not have a material impact on its
consolidated results of operations and financial condition.




Accounting
Policies and Estimates





The
preparation of our financial statements in conformity with accounting principles
generally accepted in the United States of America requires our management to
make certain 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 and the reported amounts of revenues and
expenses during the reporting period.  Our management
periodically evaluates the estimates and judgments made. Management bases its
estimates and judgments on historical experience and on various factors that are
believed to be reasonable under the circumstances. Actual results may differ
from these estimates as a result of different assumptions or
conditions.


As such,
in accordance with the use of accounting principles generally accepted in the
United States of America, our actual realized results may differ from
management’s initial estimates as reported.  A summary of significant
accounting policies are detailed in notes to the financial statements which are
an integral component of this filing.


-17-
 Table of Contents


RESULTS
OF OPERATIONS
 
 Fiscal Year Ended December 31, 2008,
Compared to Fiscal Year Ended December 31, 2007
 
 Our
revenues for year ended December 31, 2008 increased to $2,530,424 from $11,530
during fiscal 2007, respectively:
  1st qtr
sales were $226,717
 2nd qtr
sales were $404,887
 3rd qtr
sales were $501,290
 4th qtr
sales were $1,397,530
  This
increase in revenue was a direct result of growth in sales and marketing of our
products, combined with the addition of NDS Nutritional Products, Inc. products
during the fourth-quarter of 2008.
 
 From the
beginning of October, through the end of the year, we focused revenue growth on
the integration of the NDS/Infinite Labs with the existing Fusion Premium Energy
sales team.  Prior to then, Fusion Premium Energy had built its
distribution primarily through the convenience store channel and FD&M,
(Food, Drug and Mass). NDS/Infinite Labs brought strong ties to the specialty
retail channels with its exclusive line of sports nutrition products sold
through GNC stores and broader distribution of its other brands through
retailers like Vitamin Shoppes.   By the end of the 4th Quarter
of 2008, we recognized synergies in the Military and Sporting Goods
channels.
 
 Cost of
goods sold for the year ended December 31, 2008 increased to $1,617,503 as
compared to year ended 2007 of $7,845, respectively. The increase in our cost of
goods sold is directly related to the increase in our sales. We continue to
develop new products and believe the current difficult economic climate will
enable us to negotiate better supplier prices and terms in 2009.
  General
and administrative expenses for the year ended December 31, 2008 increased to
$4,275,707 from $3,450,557 for year ended 2007, respectively. The increase
relates to employing full time employees and officers during 2008 rather than
consultants, along with a the increased costs associated with our status as a
reporting company, including costs associated with our filings with the U.S.
Securities and Exchange Commission which matches with our overall business plan.
With the acquisition of NDS, we inherited a seasoned back office with excellent
administration skills. In January, we completed the consolidation of all of the
our corporate operations to Omaha, NE and expect this to further decrease in our
administrative expenses as a percentage of revenues.
  Selling
and marketing expenses for the year ended December 31, 2008 increased to
$3,108,936 from $197,736 for 2007, respectively. The increase is directly
associated in the dramatic increase in sales, increased travel to promote the
sales of our products, as well as the costs associated with hiring investor
relations firms, marketing firms, advertising firms, company sponsors, and stock
related services also. Our advertising expenses for the year of $2,265,322
primarily reflect our investment in extreme athlete sponsorships to gain
immediate recognition for our Fusion Premium Energy brand, following the
direction set by the leaders in the category. Between the athletes in Super
Cross, (Chad Reed who became the world champion in 2008), Snow Boarding, Biking,
MMA Fighters and World of Outlaws Dirt Car Racing, (Darrel Lanigan who won the
championship in Late Car Racing), we spent approximately $1,000,000 and issued
680,000 in common stock for sponsorship of our products which was valued at
$1.00 per share and represented the increase in selling and marketing expenses.
Looking towards 2009, we believe that in a tighter economy, the most effective
marketing spends will be ‘in store’ focused, with large displays that draw the
customers attention after they have entered the store, once again following the
lead of much larger brands who have already decreased their commitment to
endorsements and sponsorships. -18-
 Table of Contents
  Depreciation
and amortization for the year ended December 31, 2008 increased to $69,533 from
$14,596 for 2007, respectively. The increase in depreciation and amortization
relates to the acquisition of new assets from Nutrition Products, Inc. in the
fourth quarter of the year.
  Research
and development for year ended December 31, 2008 decreased to $120,634 from
$272,469 for 2007, respectively. The decrease in research and development
reflects products developed and expensed in 2007, that were brought to market in
2008.
  In total,
we incurred losses of approximately $6,625,991, and $3,961,602 for year ended
December 31, 2008 and 2007, respectively. During 2008 we made major investments
in building our products, brands and distribution, which will not be recurring
expenses going forward, but the results of which are reflected in our increased
revenues from quarter to quarter. Non-recurring expenses for 2008 made up the
majority and totaled $4,406,963, from which over 55% were non-cash expenses paid
in stock. $2,462,431 represented non-cash expenses paid from common stock,
preferred A and warrants issued for services; $1,944,532 represented onetime
expenses for startup Marketing for Fusion; Non-recurring G&A for us,
(including legal costs for acquiring NDS and raising new capital); Non-recurring
Sales and Marketing for us and Sponsorship expenses that we do not expect to
recur in 2009.
  Net of
our non-recurring expenses, our loss for 2008 would be $2,219,028 vs. $3,961,602
for the year ended December 31, 2008.
  The
current economy is a two-edged sword. We cannot be naive to slowdown in consumer
purchases and how that can affect the overall marketplace. At the same time, we
believe this will create opportunities for a company like ours with strong brand
momentum. We have already seen numerous competing brands cease to exist because
their revenues were too far below breakeven and they could not support their
debt load. We have no long term debt and conservative sales projections for 2009
take us past breakeven.
  Until the
economy does recover, we must take advantage of the reduction in business that
our suppliers are experiencing also, to reduce our cost of goods sold, freight
charges and packaging. This will also be a time to develop strategic
partnerships with distributors and add experienced salespeople from our industry
that would not have been affordable in the past, but are now excited to find an
opportunity with a company that is focused on growth vs. downsizing. Finally, we
cannot overlook the effects this economy may have on competitors or
complimenting brands that can no longer expand do to a lack of capital and have
no market for an exit strategy.





LIQUIDITY
AND CAPITAL RESOURCES




We have
maintained a minimum of three months of working capital since September of
2005.  This reserve was intended to allow for an adequate amount of
time to secure additional funds from investors as needed.  To date,
management has succeeded in securing capital as needed.  Our monthly
cash requirement amount is approximately $125,000.  During the year
ended December 31, 2008, we sold 4,157,477 common and preferred series A shares
for $4,301,933.


-19-
 Table of Contents




Our cash
used in operating activities is $4,751,144 and $1,413,547 years ended December
31, 2008 and 2007 respectively.  The increase is mainly attributable to the
increase in operating expenses including inventory buildup in the current
year.





Cash used
by investing activities was $1,835,401 and $43,009 years ended December 31, 2008
and 2007, respectively. The increase in asset was a consequence of our Asset
Purchase Agreement with Nutritional Products, Inc.





Cash
provided by financing activities was $6,259,727 and $1,986,000 years ended
December 31, 2008 and 2007, respectively. The increase is due to an increase in
raising funds from our shareholders to develop our products for sale in the
market.  We sold common and preferred series A stock and received
proceeds of $4,301,933 and had cost of capital of $250,713 for the year ended
December 31, 2008 as compared to $1,651,000 in the proceeds from convertible
notes payable and sold stock years ended December 31, 2008 and
2007.





Recent
Developments





We have
entered into a Promissory Bridge Note with Vespa Beverages, Inc. (“Vespa”) were
as we have loaned Vespa a total sum of $250,000 at an interest rate of 10% per
annum.  The outstanding principal amount of this Note together with
all accrued but unpaid interest shall automatically be exchange into securities
issued in equity or equity linked financing at the option of the Company at the
maturity date of December 31, 2009.




ITEM7A.  QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK


We do not
hold any derivative instruments and do not engage in any hedging
activities.


-20-
 Table of Contents





ITEM8.  FINANCIAL STATEMENTS





BOND
LABORATORIES, INC.





TABLE OF CONTENTS
                    PageINDEPENDENT REGISTERED PUBLIC ACCOUNTING
      FIRM:Jewett Schwartz Wolfe & Associates
                    F-2CONSOLIDATED FINANCIAL STATEMENTS:Consolidated Balance Sheet at December 31, 2008 and
      2007
                    F-3Consolidated Statements of Operations for the years
      ended  December 31, 2008 and 2007
                    F-4Consolidated Statements of Stockholders’ Equity for the
      years ended December 31, 2008 and 2007
                    F-5Consolidated Statements of Cash Flows for the years
      ended December 31, 2008 and 2007
                    F-6NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS
                    F-7




F-1
 Table of Contents




REPORTOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM







To the
Board of Directors and Stockholders of


BOND
LABORATORIES, INC.





We have
audited the accompanying consolidated balance sheet of Bond Laboratories, Inc.
and Subsidiaries as of December 31, 2008 and 2007, and the related consolidated
statements of operations, changes in shareholders' deficiency and cash flows for
the year then ended. These consolidated 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 audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated 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 provided a reasonable basis for our
opinion.





In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of Bond Laboratories, Inc. and
Subsidiaries, as of December 31, 2008 and 2007, and the results of their
operations and their cash flows for the period then ended in conformity with
accounting principles generally accepted in the United States of
America.





JEWETT,
SCHWARTZ, WOLFE & ASSOCIATES


Hollywood,
Florida


March 15,
2009





200 SOUTH
PARK ROAD, SUITE 150 ● HOLLYWOOD, FLORIDA 33020 ● TELEPHONE (954) 922-5885 ● FAX
(954) 922-5957


MEMBER -
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS ● FLORIDA INSTITUTE OF
CERTIFIED PUBLIC ACCOUNTANTS


PRIVATE
COMPANIES PRACTICE SECTION OF THE AICPA ● REGISTERED WITH THE PUBLIC COMPANY
ACCOUNTING OVERSIGHT BOARD OF THE SEC


F-2
 Table of Contents


BOND
      LABORATORIES, INC.CONSOLIDATEDBALANCE SHEETSDecember
      31,ASSETS:
                              
                              2008
                              
                              
                              2007CURRENT
      ASSETSCash
                              
                              $
                              263,379
                              
                              
                              $
                              590,197Accounts
      receivables - net
                              
                              
                              428,790
                              
                              
                              
                              4,532Inventory
                              
                              
                              1,984,245
                              
                              
                              
                              -Notes
      receivables
                              
                              
                              250,137
                              
                              
                              
                              -Prepaid
      expenses and other current assets
                              
                              
                              30,240
                              
                              
                              
                              624,527Total
      current assets
                              
                              
                              2,956,791
                              
                              
                              
                              1,219,256PROPERTY
      AND EQUIPMENT, net
                              
                              
                              238,328
                              
                              
                              
                              92,977Intangibles
      assets, net
                              
                              
                              2,160,860
                              
                              
                              
                              -Deposits
                              
                              
                              5,728
                              
                              
                              
                              2,727TOTAL
      ASSETS
                              
                              $
                              5,361,707
                              
                              
                              $
                              1,314,960LIABILITIES
      AND STOCKHOLDERS' EQUITY:CURRENT
      LIABILITIES:Accounts
      payable
                              
                              $
                              950,947
                              
                              
                              $
                              30,000Accrued
      expenses and other liabilities
                              
                              
                              238,617
                              
                              
                              
                              253Note
      payable - affiliate
                              
                              
                              50,769
                              
                              
                              
                              -Note
      payable - current
                              
                              
                              934,861
                              
                              
                              
                              -Total
      current liabilities
                              
                              
                              2,175,194
                              
                              
                              
                              30,253Notes
      payable - long term
                              
                              
                              118,102
                              
                              
                              
                              -TOTAL
      LIABILITIES
                              
                              
                              2,293,296
                              
                              
                              
                              30,253CONTINGENCIES
      AND COMMITMENTSSTOCKHOLDERS'
      EQUITY:Preferred
      stock series A, $.01 par value, 10,000,000 shares authorized; 5,659,477
      and 5,000,000 issued and outstanding as of December 31, 2008 and 2007,
      respectively
                              
                              
                              56,595
                              
                              
                              
                              50,000Preferred
      stock series B, $.01 par value, 1,000 sharesauthorized; none issued and
      outstanding, 10% Cumulative Perpetual with a Stated Value of $10,000 per
      share; as of December 31, 2008 and 2007, respectively
                              
                              
                              -
                              
                              
                              
                              -Common
      stock, $.01 par value, 75,000,000 shares authorized; 25,839,928 and
      20,431,450 issued and outstanding as of December 31, 2008 and 2007,
      respectively
                              
                              
                              258,399
                              
                              
                              
                              204,314Additional
      paid-in capital
                              
                              
                              12,306,023
                              
                              
                              
                              5,807,008Common
      stock subscribed, 7,500,000
                              
                              
                              1,249,792
                              
                              
                              
                              -Preferred
      A stock subscribed, 4,000,000
                              
                              
                              600,000
                              
                              
                              
                              -Preferred
      B stock subscribed, 125
                              
                              
                              208
                              
                              
                              
                              -Accumulated
      deficit
                              
                              
                              (11,402,606
                              )
                              
                              
                              (4,776,615
                              )Total
      stockholders' equity
                              
                              
                              3,068,411
                              
                              
                              
                              1,284,707TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY
                              
                              $
                              5,361,707
                              
                              
                              $
                              1,314,960





The
accompanying notes are an integral part of these consolidated financial
statements.


F-3
 Table of Contents




BOND
      LABORATORIES, INC.CONSOLIDATEDSTATEMENT OF OPERATIONSFOR
      THE YEARS ENDED DECEMBER 31, 2008 AND 20072008
                
                
                2007Revenue
                
                $
                2,530,424
                
                
                $
                11,530Total
                
                
                2,530,424
                
                
                
                11,530Cost
      of Goods Sold
                
                
                1,617,503
                
                
                
                7,845Gross
      Profits
                
                
                912,921
                
                
                
                3,685OPERATING
      EXPENSES:General
      and administrative
                
                
                4,275,707
                
                
                
                3,450,557Selling
      and marketing
                
                
                3,108,936
                
                
                
                197,736Depreciation
      and amortization
                
                
                69,553
                
                
                
                14,596Research
      and development
                
                
                120,634
                
                
                
                272,469Total
      operating expenses
                
                
                7,574,830
                
                
                
                3,935,358OPERATING
      LOSS
                
                
                (6,661,909
                )
                
                
                (3,931,673
                )OTHER
      (INCOME) AND EXPENSESInterest
      expense
                
                
                8,566
                
                
                
                42,631Interest
      income
                
                
                (36,984
                )
                
                
                (6,702
                )Rental
      income
                
                
                (7,500
                )
                
                
                (6,000
                )Total
      other (income) expense
                
                
                (35,918
                )
                
                
                29,929NET
      LOSS
                
                $
                (6,625,991
                )
                
                $
                (3,961,602
                )NET
      LOSS PER SHARE:Basic
                
                $
                (0.28
                )
                
                $
                (0.43
                )Diluted
                
                $
                (0.22
                )
                
                $
                (0.38
                )Basic
                
                
                23,657,487
                
                
                
                9,131,404Diluted
                
                
                30,019,362
                
                
                
                10,370,004





The
accompanying notes are an integral part of these consolidated financial
statements.


F-4
 Table of Contents


BOND
      LABORATORIES, INC.CONSOLIDATEDSTATEMENT OF STOCKHOLDER'
    EQUITYFOR
      THE YEARS ENDED DECEMBER 31, 2008 AND 2007\
      ------- Preferred Stock --------\Common
      Stock
                                                                                              
                                                                                              Preferred
      A
                                                                                              
                                                                                              Preferred
      BShares
                                                                                              
                                                                                              Amount
                                                                                              
                                                                                              Shares
                                                                                              
                                                                                              Amount
                                                                                              
                                                                                              Shares
                                                                                              
                                                                                              Amount
                                                                                              
                                                                                              Add-itionalPaid-inCapital
                                                                                              
                                                                                              Common
      StockSub-scribedNot
      Issued
                                                                                              
                                                                                              Preferred
      AStock
      Sub-scribedNot
      Issued
                                                                                              
                                                                                              Preferred
      BStock
      Sub-scribedNot
      Issued
                                                                                              
                                                                                              Accum-ulatedDeficit
                                                                                              
                                                                                              TotalDECEMBER
      31, 2006
                                                                                              
                                                                                              4,954,000
                                                                                              
                                                                                              $
                                                                                              49,540
                                                                                              
                                                                                              
                                                                                              5,000,000
                                                                                              
                                                                                              $
                                                                                              50,000
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              $
                                                                                              -
                                                                                              
                                                                                              $
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              
                                                                                              $
                                                                                              -
                                                                                              
                                                                                              $
                                                                                              (815,013
                                                                                              )
                                                                                              $
                                                                                              (715,473
                                                                                              )Common
      stock issued for cash
                                                                                              
                                                                                              2,014,000
                                                                                              
                                                                                              
                                                                                              20,140
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              3,310,301
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              3,330,441Common
      stock issued for services
                                                                                              
                                                                                              2,917,625
                                                                                              
                                                                                              
                                                                                              29,176
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              1,630,860
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              1,660,036Common
      stock issued in a 2 for 1 forward split
                                                                                              
                                                                                              9,067,225
                                                                                              
                                                                                              
                                                                                              90,672
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              (90,672
                                                                                              )
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -Common
      stock issued in convertible debt and interest expense
                                                                                              
                                                                                              1,478,600
                                                                                              
                                                                                              
                                                                                              14,786
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              944,133
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              958,919Warrants
      issued 1,238,600 @ $.01
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              12,386
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              12,386Net
      loss
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              (3,961,602
                                                                                              )
                                                                                              (
                                                                                              3,961,602
                                                                                              )DECEMBER
      31, 2007
                                                                                              
                                                                                              20,431,450
                                                                                              
                                                                                              $
                                                                                              204,314
                                                                                              
                                                                                              
                                                                                              5,000,000
                                                                                              
                                                                                              $
                                                                                              50,000
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              $
                                                                                              -
                                                                                              
                                                                                              $
                                                                                              5,807,008
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              $
                                                                                              -
                                                                                              
                                                                                              $
                                                                                              -
                                                                                              
                                                                                              $
                                                                                              (4,776,615
                                                                                              )
                                                                                              $
                                                                                              1,284,707Common
      stock issued for cash
                                                                                              
                                                                                              3,642,456
                                                                                              
                                                                                              
                                                                                              36,425
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              3,461,575
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              3,498,000Common
      stock issued for services
                                                                                              
                                                                                              1,340,522
                                                                                              
                                                                                              
                                                                                              13,405
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              1,531,793
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              1,545,198Common
      stock cancelled
                                                                                              
                                                                                              (1,124,500
                                                                                              )
                                                                                              
                                                                                              (11,245
                                                                                              )
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              11,245
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -Common
      stock issued in the Asset Purchase Agreement
                                                                                              
                                                                                              1,550,000
                                                                                              
                                                                                              
                                                                                              15,500
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              775,000
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              790,500Cost
      of raising capital
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              (250,713
                                                                                              )
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              (250,713
                                                                                              )Preferred
      series A shares subscribed not issued 4,000,000 @ $.15
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              600,000
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              600,000Preferred
      series B shares subscribed not issued 125@ $.17
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              208
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              208Common
      stock subscribed not issued 7,500,000 @ $.17
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              1,249,792
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              1,249,792Preferred
      stock issued for cash
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              659,477
                                                                                              
                                                                                              
                                                                                              6,595
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              652,882
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              659,477Warrants
      issued 636,400 @ $.01 January 31, 2008
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              6,364
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              6,364Warrants
      issued 2,586,875 @ $.01 June 30, 2008
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              25,869
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              25,869Warrants
      issued 1,900,000 @ $.15 December 31, 2008
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              285,000
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              285,000Net
      loss
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              
                                                                                              (6,625,991
                                                                                              )
                                                                                              (
                                                                                              6,625,991
                                                                                              )DECEMBER
      31, 2008
                                                                                              
                                                                                              25,839,928
                                                                                              
                                                                                              $
                                                                                              258,399
                                                                                              
                                                                                              
                                                                                              5,659,477
                                                                                              
                                                                                              $
                                                                                              56,595
                                                                                              
                                                                                              
                                                                                              -
                                                                                              
                                                                                              $
                                                                                              -
                                                                                              
                                                                                              $
                                                                                              12,306,023
                                                                                              
                                                                                              $
                                                                                              1,249,792
                                                                                              
                                                                                              $
                                                                                              600,000
                                                                                              
                                                                                              $
                                                                                              208
                                                                                              
                                                                                              $
                                                                                              (11,402,606
                                                                                              )
                                                                                              $
                                                                                              3,068,411





The
accompanying notes are an integral part of these consolidated financial
statements.


F-5
 Table of Contents


BOND
      LABORATORIES, INC.CONSOLIDATEDSTATEMENTS OF CASH FLOWSFOR
      THE YEARS ENDED DECEMBER 31, 2008 AND 20072008
                      
                      
                      2007Net
      loss
                      
                      $
                      (6,625,991
                      )
                      
                      $
                      (3,961,602
                      )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Depreciation
      and amortization
                      
                      
                      69,553
                      
                      
                      
                      14,596Common
      stock issued for services
                      
                      
                      1,545,198
                      
                      
                      
                      2,509,477Warrants
      issued in conversion of debt
                      
                      
                      -
                      
                      
                      
                      12,386Stock
      warrants issued
                      
                      
                      317,233
                      
                      
                      
                      -Preferred
      series A subscribed not issued
                      
                      
                      600,000
                      
                      
                      
                      26,625Changes
      in operating assets and liabilities:Accounts
      receivables
                      
                      
                      (424,258
                      )
                      
                      
                      (4,532
                      )Inventory
                      
                      
                      (1,984,245
                      )
                      
                      
                      -Prepaid
      expenses
                      
                      
                      594,286
                      
                      
                      
                      (24,527
                      )Deposits
                      
                      
                      (3,000
                      )
                      
                      
                      (2,727
                      )Accounts
      payables
                      
                      
                      920,947
                      
                      
                      
                      15,500Accrued
      liabilities
                      
                      
                      239,133
                      
                      
                      
                      1,257Net
      cash used in operating activities
                      
                      
                      (4,751,144
                      )
                      
                      
                      (1,413,547
                      )CASH
      FLOWS FROM INVESTING ACTIVITIES:Note
      receivable
                      
                      
                      (250,137
                      )
                      
                      
                      -Purchase
      of property and equipment
                      
                      
                      (178,279
                      )
                      
                      
                      -Purchase
      of intangible asset
                      
                      
                      (1,406,985
                      )
                      
                      
                      (43,009
                      )Net
      cash used in investing activities
                      
                      
                      (1,835,401
                      )
                      
                      
                      (43,009
                      )CASH
      FLOWS FROM FINANCING ACTIVITIES:Proceeds
      from the issuances of common stock
                      
                      
                      3,498,000
                      
                      
                      
                      1,651,000Cost
      of raising capital
                      
                      
                      (250,713
                      )
                      
                      
                      -Proceeds
      from affiliated note payable
                      
                      
                      50,000
                      
                      
                      
                      -Proceeds
      preferred B and common stock subscribed
                      
                      
                      1,250,000
                      
                      
                      
                      335,000Proceeds
      from the issuances of preferred A stock
                      
                      
                      659,477
                      
                      
                      
                      -Proceeds
      from note payable
                      
                      
                      1,052,963
                      
                      
                      
                      -Net
      cash provided by financing activities
                      
                      
                      6,259,727
                      
                      
                      
                      1,986,000INCREASE
      (DECREASE) IN CASH
                      
                      
                      (326,818
                      )
                      
                      
                      529,444CASH,
      BEGINNING OF PERIOD
                      
                      
                      590,197
                      
                      
                      
                      60,753CASH,
      END OF PERIOD
                      
                      $
                      263,379
                      
                      
                      $
                      590,197Supplemental
      disclosure of non-cash investing and financing activitiesConversion
      of debt into common stock
                      
                      $
                      -
                      
                      
                      $
                      815,000Issuance
      of common stock for repayment of loan affiliates
                      
                      $
                      -
                      
                      
                      $
                      117,294Issuance
      of company stock for prepaid services
                      
                      $
                      -
                      
                      
                      $
                      600,000Issuance
      of company stock for accrued liabilities
                      
                      $
                      -
                      
                      
                      $
                      230,000Issuance
      of company stock for the assets purchase
                      
                      $
                      790,500
                      
                      
                      $
                      -
 
 The
accompanying notes are an integral part of these consolidated financial
statements.
 F-6
 Table of Contents


BOND
LABORATORIES, INC. AND SUBSIDIARIES


NOTESTO CONSOLIDATED FINANCIAL STATEMENTS


FOR THE YEAR ENDED DECEMBER
31, 2008and
2007





NOTE 1 –
BACKGROUND





Bond
Laboratories, Inc. (“The Company”) was incorporated in the state of Nevada on
July 26, 2005.  The Company has its wholly owned subsidiary Fusion
Premium Energy, Inc. that was incorporated in August of 2007 and was operating
in the year ended December 31, 2008.  In October, 2008 the Company
acquired the assets of Nutritional Products, Inc. and it is a wholly owned
subsidiary of the Company.  The Company is focused on the development
of fortified foods and beverage, in three major categories: energy drinks, pain
relief, and weight loss.  Energy drinks were chosen as the initial
target category, as management deemed it to be the easiest barrier to
entry.  Bond Labs develops and markets products that address the
constantly changing needs of consumers, and contracts out manufacturing and
fulfillment to keep margins high and overhead low.  On November 8,
2007 Bond Laboratories launched the Fusion 2 ounce.6+ hr. energy shot at the
NACS show in Atlanta, Ga. Fusion  has received  orders and
subsequent re-orders from some of the biggest C-store chains, drug store chains,
sporting goods stores, casinos, and health clubs in the
nation.  Fusion has also established relationships with all of the
nation’s largest distributors. Bond Laboratories, Inc. now trades under the
symbol BNLB.OB on the OTC:BB market.





NOTE 2 –
BASIS OF PRESENTATION





The
accompanying financial statements represent the consolidated financial position
and results of operations of the Company and include the accounts and results of
operations of the Company and its wholly owned subsidiaries.  The
accompanying consolidated financial statements include the active entity of Bond
Laboratories, Inc. and its wholly owned subsidiaries Fusion Premium Energy, Inc.
and the purchased assets of Nutritional Products, Inc.





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.





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.





Revenue
Recognition





Revenue
includes product sales. The Company recognizes revenue from product sales in
accordance with Staff Accounting Bulletin (SAB) No. 104, “Revenue Recognition in
Financial Statement” which is at the time customers are invoiced at shipping
point, provided title and risk of loss has passed to the customer, evidence of
an arrangement exists, fees are contractually fixed or determinable, collection
is reasonably assured through historical collection results and regular credit
evaluations, and there are no uncertainties regarding customer
acceptance.


F-7
 Table of Contents


Advertising
Costs





All
advertising costs are charged to expense as incurred. Advertising expense for
the years ended December 31, 2008 and 2007 was approximately $1,994,111 and
$45,000, respectively.





Accounts
Receivable





Substantially
all of the Company’s accounts receivable balance is relate to trade receivables.
Trade accounts receivable are recorded at the invoiced amount and do not bear
interest. The allowance for doubtful accounts is the Company’s best estimate of
the amount of probable credit losses in its existing accounts receivable. The
Company will maintain allowances for doubtful accounts for estimated losses
resulting from the inability of its customers to make required payments for
products. Accounts with known financial issues are first reviewed and specific
estimates are recorded. The remaining accounts receivable balances are then
grouped in categories by the amount of days the balance is past due, and the
estimated loss is calculated as a percentage of the total category based upon
past history. Account balances are charged off against the allowance when it is
probable the receivable will not be recovered. No allowance for doubtful
accounts and bad debts were written off in December 31, 2008 and 2007 as the
Company was a development stage company.





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, 2008,
cash and cash equivalents include cash on hand and cash in the
bank.





Inventory





The
Company inventory is carried at the lower of cost or net realizable value using
the first-in, first-out (“FIFO”) method.  The Company evaluates the
need to record adjustments for inventory on a regular basis.  Our
policy is to evaluate all inventories including raw material (component), and
finished goods.  These inventories consisted of energy drinks, pain
relief, and weight loss products.  At December 31 2008 and 2007, the
value of the company’s inventory was $ 1,984,245 and $0,
respectively.





Research and
Development





Costs are
expensed as incurred.  There was $120,634 in research and development
expense for year ended December 31, 2008 as compared to $272,469 for year ended
December 31, 2007.





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.  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
      PeriodFurniture
      and Fixture
                3
      YearsOffice
      equipment
                3
      YearsLeasehold
      improvements
                5
      Years


F-8
 Table of Contents





Goodwill and Other
Intangible Assets




The
Company adopted Statement of Financial Accounting Standard (“SFAS No.”) No. 142,
Goodwill and Other Intangible
Assets, effective July 1, 2002.  In accordance with SFAS No.
142, "Goodwill and Other Intangible Assets," goodwill, represents the excess of
the purchase price and related costs over the value assigned to net tangible and
identifiable intangible assets of businesses acquired and accounted for under
the purchase method, acquired in business combinations is assigned to reporting
units that are expected to benefit from the synergies of the combination as of
the acquisition date. Under this standard, goodwill and intangibles with
indefinite useful lives are no longer amortized.  The Company assesses
goodwill and indefinite-lived intangible assets for impairment annually during
the fourth quarter, or more frequently if events and circumstances indicate
impairment may have occurred in accordance with SFAS No. 142. If the carrying
value of a reporting unit's goodwill exceeds its implied fair value, the Company
records an impairment loss equal to the difference. SFAS No. 142 also requires
that the fair value of indefinite-lived purchased intangible assets be estimated
and compared to the carrying value. The Company recognizes an impairment loss
when the estimated fair value of the indefinite-lived purchased intangible
assets is less than the carrying value.   The Company has
recorded goodwill associated with the acquisition of NDS in the amount of
$2,190,000 and has recognized no impairment loss as of December 31,
2008.





Impairment of Long-Lived
Assets





In
accordance with SFAS No. 144, long-lived assets, such as property, plant, and
equipment, and purchased intangibles, are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. Goodwill and other intangible assets are tested for
impairment.  Recoverability of assets to be held and used is measured
by a comparison of the carrying amount of an asset to estimated undiscounted
future cash flows expected to be generated by the asset. If the carrying amount
of an asset exceeds its estimated future cash flows, an impairment charge is
recognized by the amount by which the carrying amount of the asset exceeds the
fair value of the asset.  There were no events or changes in
circumstances that necessitated an impairment of long lived assets.





Income
Taxes





Deferred
income taxes are provided based on the provisions of SFAS No. 109, "Accounting
for Income Taxes" ("SFAS No. 109"), to reflect the tax consequences in future
years of differences between the tax bases of assets and liabilities and their
financial reporting amounts based on enacted tax laws and statutory tax rates
applicable to the periods in which the differences are expected to affect
taxable income.  Valuation allowances are established when necessary
to reduce deferred tax assets to the amount expected to be
realized.





Concentration of Credit
Risk





The
Company maintains its operating cash balances in banks in Solana Beach,
California and Omaha Nebraska.  The Federal Depository Insurance
Corporation (FDIC) insures accounts at each institution up to
$250,000.





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, warrants, 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. F-9
 Table of Contents





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.


Reclassification





Certain
prior period amounts have been reclassified to conform to current year
presentations.





Recent Accounting
Pronouncements





Recent
accounting pronouncements that the Company has adopted or that will be required
to adopt in the future are summarized below.





Employers’
Disclosures about Postretirement Benefit Plan Assets





In
December 2008, the Financial Accounting Standards Board (“FASB”) issued FASB
Staff Position on Financial Accounting Standard (“FSP FAS”) No. 132(R)-1,
“Employers’ Disclosures about Postretirement Benefit Plan
Assets.”  This FSP amends FASB Statement No. 132(R) (“SFAS No.
132(R)”), “Employers’ Disclosures about Pensions and Other Postretirement
Benefits,” to provide guidance on an employer’s disclosures about plan assets of
a defined benefit pension or other postretirement plan.  FSP FAS No.
132(R)-1 also includes a technical amendment to SFAS No. 132(R) that requires a
nonpublic entity to disclose net periodic benefit cost for each annual period
for which a statement of income is presented.  The required
disclosures about plan assets are effective for fiscal years ending after
December 15, 2009.  The technical amendment was effective upon
issuance of FSP FAS No. 132(R)-1.  The Company is currently assessing
the impact of FSP FAS No. 132(R)-1 on its consolidated financial position and
results of operations.





Effective
Date of FASB Interpretation No. 48 for Certain Nonpublic
Enterprises





In
December 2008, the FASB issued FSP FIN No. 48-3, “Effective Date of FASB
Interpretation No. 48 for Certain Nonpublic Enterprises.”  FSP FIN No.
48-3 defers the effective date of FIN No. 48, “Accounting for Uncertainty in
Income Taxes,” for certain nonpublic enterprises as defined in SFAS No. 109,
“Accounting for Income Taxes.”  However, nonpublic consolidated
entities of public enterprises that apply U.S. generally accepted accounting
principles (GAAP) are not eligible for the deferral.FSP FIN No. 48-3 was
effective upon issuance.  The impact of adoption was not material to
the Company’s consolidated financial condition or results of operations. F-10
 Table of Contents





Disclosures
by Public Entities (Enterprises) about Transfers of Financial Assets and
Interests in Variable Interest Entities





In
December 2008, the FASB issued FSP FAS No. 140-4 and FIN No. 46(R) -8,
“Disclosures by Public Entities (Enterprises) about Transfers of Financial
Assets and Interests in Variable Interest Entities.”  This FSP amends
SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities,” to require public entities to provide
additional disclosures about transfers of financials assets.  FSP FAS
No. 140-4 also amends FIN No. 46(R)-8, “Consolidation of Variable Interest
Entities,” to require public enterprises, including sponsors that have a
variable interest entity, to provide additional disclosures about their
involvement with a variable interest entity.  FSP FAS No. 140-4 also
requires certain additional disclosures, in regards to variable interest
entities, to provide greater transparency to financial statement
users.  FSP FAS No. 140-4 is effective for the first reporting period
(interim or annual) ending after December 15, 2008, with early application
encouraged.  The Company is currently assessing the impact of FSP FAS
No. 140-4 on its consolidated financial position and results of
operations.





Accounting
for an Instrument (or an Embedded Feature) with a Settlement Amount That is
Based on the Stock of an Entity’s Consolidated Subsidiary





In
November 2008, the FASB issued FSP Emerging Issues Task Force (“EITF”) Issue No.
08-8, “Accounting for an Instrument (or an Embedded Feature) with a Settlement
Amount that is based on the Stock of an Entity’s Consolidated
Subsidiary.”  EITF No. 08-8 clarifies whether a financial instrument
for which the payoff to the counterparty is based, in whole or in part, on the
stock of an entity’s consolidated subsidiary is indexed to the reporting
entity’s own stock.  EITF No. 08-8 also clarifies whether or not stock
should be precluded from qualifying for the scope exception of SFAS No. 133,
“Accounting for Derivative Instruments and Hedging Activities,” or from being
within the scope of EITF No. 00-19, “Accounting for Derivative Financial
Instruments Indexed to, and Potentially Settled in, a Company’s Own
Stock.”  EITF No. 08-8 is effective for fiscal years beginning on or
after December 15, 2008, and interim periods within those fiscal
years.  The Company is currently assessing the impact of EITF No. 08-8
on its consolidated financial position and results of operations.


Accounting
for Defensive Intangible Assets





In
November 2008, the FASB issued EITF Issue No. 08-7, “Accounting for Defensive
Intangible Assets.”  EITF No. 08-7 clarifies how to account for
defensive intangible assets subsequent to initial measurement.  EITF
No. 08-7 applies to all defensive intangible assets except for intangible assets
that are used in research and development activities.  EITF No. 08-7
is effective for intangible assets acquired on or after the beginning of the
first annual reporting period beginning on or after December 15,
2008.  The Company is currently assessing the impact of EITF No. 08-7
on its consolidated financial position and results of operations.





Equity
Method Investment Accounting Considerations





In
November 2008, the FASB issued EITF Issue No. 08-6 (“EITF No. 08-6”), “Equity
Method Investment Accounting Considerations.”  EITF No. 08-6 clarifies
accounting for certain transactions and impairment considerations involving the
equity method.  Transactions and impairment dealt with are initial
measurement, decrease in investment value, and change in level of ownership or
degree of influence.  EITF No. 08-6 is effective on a prospective
basis for fiscal years beginning on or after December 15, 2008.  The
Company is currently assessing the impact of EITF No. 08-6 on its consolidated
financial position and results of operations.


F-11
 Table of Contents





Determining
the Fair Value of a Financial Asset When the Market for That Asset is Not
Active





In
October 2008, the FASB issued FSP FAS No. 157-3, “Determining the Fair Value of
a Financial Asset When the Market for That Asset is Not Active.”  This
FSP clarifies the application of SFAS No. 157, “Fair Value Measurements,” in a
market that is not active.  The FSP also provides examples for
determining the fair value of a financial asset when the market for that
financial asset is not active.  FSP FAS No. 157-3 was effective upon
issuance, including prior periods for which financial statements have not been
issued.  The impact of adoption was not material to the Company’s
consolidated financial condition or results of operations.





Issuer’s
Accounting for Liabilities Measured at Fair Value with a Third-Party Credit
Enhancement





In
September 2008, the FASB issued EITF Issue No. 08-5 (“EITF No. 08-5”), “Issuer’s
Accounting for Liabilities Measured at Fair Value with a Third-Party Credit
Enhancement.”  This FSP determines an issuer’s unit of accounting for
a liability issued with an inseparable third-party credit enhancement when it is
measured or disclosed at fair value on a recurring basis.  FSP EITF
No. 08-5 is effective on a prospective basis in the first reporting period
beginning on or after December 15, 2008.  The Company is currently
assessing the impact of FSP EITF No. 08-5 on its consolidated financial position
and results of operations.





Disclosures
about Credit Derivatives and Certain Guarantees: An Amendment of FASB Statement
No. 133 and FASB Interpretation No. 45; and Clarification of the Effective Date
of FASB Statement No. 161





In
September 2008, the FASB issued FSP FAS No. 133-1, “Disclosures about Credit
Derivatives and Certain Guarantees: An Amendment of FASB Statement No. 133 and
FASB Interpretation No. 45; and Clarification of the Effective Date of FASB
Statement No. 161.”  This FSP amends FASB Statement No. 133,
“Accounting for Derivative Instruments and Hedging Activities,” to require
disclosures by sellers of credit derivatives, including credit derivatives
embedded in a hybrid instrument.  The FSP also amends FASB
Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of Others,” to require
and additional disclosure about the current status of the payment/performance
risk of a guarantee.  Finally, this FSP clarifies the Board’s intent
about the effective date of FASB Statement No. 161, “Disclosures about
Derivative Instruments and Hedging Activities.”  FSP FAS No. 133-1 is
effective for fiscal years ending after November 15, 2008.  The
Company is currently assessing the impact of FSP FAS No. 133-1 on its
consolidated financial position and results of operations.





Determining
Whether Instruments Granted in Share-Based Payment Transactions Are
Participating Securities





In
June 2008, the FASB issued EITF Issue No. 03-6-1, “Determining Whether
Instruments Granted in Share-Based Payment Transactions Are Participating
Securities.” EITF No. 03-6-1 addresses whether instruments granted in
share-based payment transactions are participating securities prior to vesting
and, therefore, need to be included in the earnings allocation in computing
earnings per share under the two-class method. The EITF 03-6-1 affects entities
that accrue dividends on share-based payment awards during the awards’ service
period when the dividends do not need to be returned if the employees forfeit
the award. EITF 03-6-1 is effective for fiscal years beginning after
December 15, 2008. The Company is currently assessing the impact of EITF
03-6-1 on its consolidated financial position and results of
operations.


F-12
 Table of Contents




Determining
Whether an Instrument (or an Embedded Feature) Is Indexed to an entity's Own
Stock





In June
2008, the FASB ratified EITF Issue No. 07-5, "Determining Whether an Instrument
(or an Embedded Feature) Is Indexed to an Entity's Own Stock.”  EITF
07-5 provides that an entity should use a two step approach to evaluate whether
an equity-linked financial instrument (or embedded feature) is indexed to its
own stock, including evaluating the instrument's contingent exercise and
settlement provisions.  It also clarifies on the impact of foreign
currency denominated strike prices and market-based employee stock option
valuation instruments on the evaluation.  EITF 07-5 is effective for
fiscal years beginning after December 15, 2008.  The Company is
currently assessing the impact of EITF 07-5 on its consolidated financial
position and results of operations.





Accounting
for Convertible Debt Instruments That May Be Settled in Cash upon Conversion
(Including Partial Cash Settlement)





In
May 2008, the FASB issued FSP Accounting Principles Board (“APB”) Opinion
No. 14-1, “Accounting for Convertible Debt Instruments That May Be
Settled in Cash upon Conversion (Including Partial Cash Settlement).” The FSP
clarifies the accounting for convertible debt instruments that may be settled in
cash (including partial cash settlement) upon conversion.  The FSP
requires issuers to account separately for the liability and equity components
of certain convertible debt instruments in a manner that reflects the issuer's
nonconvertible debt (unsecured debt) borrowing rate when interest cost is
recognized.  The FSP requires bifurcation of a component of the debt,
classification of that component in equity and the accretion of the resulting
discount on the debt to be recognized as part of interest expense in our
consolidated statement of operations.  The FSP requires retrospective
application to the terms of instruments as they existed for all periods
presented.  The FSP is effective for fiscal years beginning after
December 15, 2008 and early adoption is not permitted.  The Company is
currently evaluating the potential impact of FSP APB 14-1 upon its consolidated
financial statements.




The
Hierarchy of Generally Accepted Accounting Principles




In May
2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally Accepted
Accounting Principles.”  SFAS No. 162 identifies the sources of
accounting principles and the framework for selecting the principles used in the
preparation of financial statements.  SFAS No. 162 is effective 60
days following the SEC's approval of the Public Company Accounting Oversight
Board amendments to AU Section 411, "The Meaning of Present Fairly in Conformity
with Generally Accepted Accounting Principles".  The implementation of
this standard will not have a material impact on the Company's consolidated
financial position and results of operations.




Determination
of the Useful Life of Intangible Assets




In April
2008, the FASB issued FSP FAS No. 142-3, “Determination of the Useful Life of
Intangible Assets”, which amends the factors that should be considered in
developing renewal or extension assumptions used to determine the useful life of
intangible assets under SFAS No. 142 “Goodwill and Other Intangible
Assets”.  The intent of this FSP is to improve the consistency between the
useful life of a recognized intangible asset under SFAS No. 142 and the period
of the expected cash flows used to measure the fair value of the asset under
SFAS No. 141 (revised 2007) “Business Combinations” and other U.S. generally
accepted accounting principles.    The Company is currently
evaluating the potential impact of FSP FAS No. 142-3 on its consolidated
financial statements.




Disclosure
about Derivative Instruments and Hedging Activities




In March
2008, the FASB issued SFAS No. 161, “Disclosure about Derivative
Instruments and Hedging Activities, an amendment of SFAS No.
133.” This statement requires that objectives for using derivative instruments
be disclosed in terms of underlying risk and accounting designation. The Company
is required to adopt SFAS No. 161 on January 1, 2009. The Company is currently
evaluating the potential impact of SFAS No. 161 on the Company’s consolidated
financial statements.


F-13
 Table of Contents




Delay
in Effective Date




In
February 2008, the FASB issued FSP FAS No. 157-2, “Effective Date of FASB
Statement No. 157”. This FSP delays the effective date of SFAS No. 157 for
all nonfinancial assets and nonfinancial liabilities, except those that are
recognized or disclosed at fair value on a recurring basis (at least annually)
to fiscal years beginning after November 15, 2008, and interim periods
within those fiscal years. The impact of adoption was not material to the
Company’s consolidated financial condition or results of
operations.




Business
Combinations




In
December 2007, the FASB issued SFAS No. 141(R) “Business
Combinations.”  This Statement replaces the original SFAS No.
141.  This Statement retains the fundamental requirements in SFAS
No. 141 that the acquisition method of accounting (which SFAS No. 141
called the purchase
method) be used for all business combinations and for an acquirer to be
identified for each business combination. The objective of SFAS No. 141(R) is to
improve the relevance, and comparability of the information that a reporting
entity provides in its financial reports about a business combination and its
effects. To accomplish that, SFAS No. 141(R) establishes principles and
requirements for how the acquirer:




a.
            Recognizes
      and measures in its financial statements the identifiable assets acquired,
      the liabilities assumed, and any noncontrolling interest in the
      acquiree.




b.
            Recognizes
      and measures the goodwill acquired in the business combination or a gain
      from a bargain purchase.




c.
            Determines
      what information to disclose to enable users of the financial statements
      to evaluate the nature and financial effects of the business
      combination.




This
Statement applies prospectively to business combinations for which the
acquisition date is on or after the beginning of the first annual reporting
period beginning on or after December 15, 2008 and may not be applied before
that date. The Company is unable at this time to determine the effect that its
adoption of SFAS No. 141(R) will have on its consolidated results of operations
and financial condition.




Noncontrolling
Interests in Consolidated Financial Statements—an amendment of ARB No.
51




In
December 2007, the FASB issued SFAS No. 160 “Noncontrolling Interests in
Consolidated Financial Statements – an amendment of ARB No. 51.”  This
Statement amends the original Accounting Review Board (ARB) No. 51 “Consolidated
Financial Statements” to establish accounting and reporting standards for the
noncontrolling interest in a subsidiary and for the deconsolidation of a
subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an
ownership interest in the consolidated entity that should be reported as equity
in the consolidated financial statements. This Statement is effective for fiscal
years and interim periods within those fiscal years, beginning on or after
December 15, 2008 and may not be applied before that date.  The
Company is unable at this time to determine the effect that its adoption of SFAS
No. 160 will have on its consolidated results of operations and financial
condition.




Fair
Value Option for Financial Assets and Financial Liabilities




In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
Financial Assets and Financial Liabilities – Including an amendment of SFAS No.
115,” which becomes effective for the Company on February 1, 2008, permits
companies to choose to measure many financial instruments and certain other
items at fair value and report unrealized gains and losses in earnings. Such
accounting is optional and is generally to be applied instrument by instrument.
The election of this fair-value option did not have a material effect on its
consolidated financial condition, results of operations, cash flows or
disclosures.


F-14
 Table of Contents




Fair
Value Measurements




In
September 2006, the FASB issued SFAS No. 157, "Fair Value
Measurements.”  SFAS No. 157 provides guidance for using fair value to
measure assets and liabilities.  SFAS No. 157 addresses the requests
from investors for expanded disclosure about the extent to which companies’
measure assets and liabilities at fair value, the information used to measure
fair value and the effect of fair value measurements on earnings. SFAS No. 157
applies whenever other standards require (or permit) assets or liabilities to be
measured at fair value, and does not expand the use of fair value in any new
circumstances. SFAS No. 157 is effective for financial statements issued for
fiscal years beginning after November 15, 2007 and was adopted by the Company in
the first quarter of fiscal year 2008. There was no material impact on the
Company’s consolidated results of operations and financial condition due to the
adoption of SFAS No. 157.




Accounting
Changes and Error Corrections




In May
2005, the FASB issued SFAS No. 154, "Accounting Changes and Error Corrections,”
which replaces APB Opinion No. 20, "Accounting Changes," and SFAS No. 3,
"Reporting Accounting Changes in Interim Financial Statements - An Amendment of
APB Opinion No. 28”. SFAS No. 154 provides guidance on the accounting for and
reporting of accounting changes and error corrections, and it establishes
retrospective application, or the latest practicable date, as the required
method for reporting a change in accounting principle and the reporting of a
correction of an error. SFAS No. 154 is effective for accounting changes and
corrections of errors made in fiscal years beginning after December 15, 2005.
The Company adopted SFAS No. 154 in the first quarter of fiscal year 2007 and
did not have a material impact on its consolidated results of operations and
financial condition.





NOTE 4 –
PREPAID EXPENSES





The
Company has prepaid expenses as of December 31, 2008 and 2007 as
follows:


December
      31,2008
                      
                      
                      2007Sponsorship
      Agreement
                      
                      $
                      -
                      
                      
                      $
                      600,000Legal
      Retainer
                      
                      
                      30,240
                      
                      
                      
                      5,000ProTab
      laboratories retainer
                      
                      
                      -
                      
                      
                      
                      19,527Total
                      
                      $
                      30,240
                      
                      
                      $
                      624,527





The
Company entered into a sponsorship agreement with L&M Racing, Inc. The
agreement calls for 200,000 common shares issued, as 144 common stock, and are
earned ratably through the next 12 months.  The Company issued these
shares on December 27, 2007.  The Company also has prepaid legal and
manufacturing retainers which are expenses when incurred.




NOTE 5 –
INVENTORIES




The
Company inventories as of December 31, 2008 and 2007 consists as
follows:


December
      31,2008
                      
                      
                      2007Finished
      goods
                      
                      $
                      1,684,802
                      
                      
                      $
                      -Components
                      
                      
                      299,443
                      
                      
                      
                      -Total
                      
                      $
                      1,984,245
                      
                      
                      $
                      -
 F-15
 Table of
Contents




NOTE 6 -
PROPERTY AND EQUIPMENT





The
Company has fixed assets as of December 31, 2008 and 2007 as
follows:


December
      31,2008
                    
                    
                    2007Equipment
                    
                    $
                    374,115
                    
                    
                    $
                    109,148Accumulated
      depreciation
                    
                    
                    (135,787
                    )
                    
                    
                    (16,171
                    )Total
                    
                    $
                    238,328
                    
                    
                    $
                    92,977





Depreciation
Expense is $32,908 for December 31, 2008 compared to $14,596 for December 31,
2007.




NOTE 7 -
ACQUISITON





On
October 1, 2008, the Company entered into an Asset Purchase Agreement with Cory
Wiedel, and Ryan Zink, (“Shareholders”), and NDS Nutritional Products, Inc.
(“NDS”), a Nebraska based sole proprietorship, and its
owner.    NDS has a retail distribution establishment that
supplies pain relief, and weight loss products.  The Company will
purchase substantially all of the tangible properties, equipment, tenant
improvements, customer accounts, customer lists, goodwill, software,
intellectual property, component inventory and all insurance benefits, including
rights and proceeds in or related to the retail operations of NDS, in accordance
with the provisions of the agreement.  The estimated purchase price is
$2,190,500, which will be payable as follows:




(a)  Seven
Hundred Thousand Dollars ($700,000) in cash at the Closing.




(b)  Three
Hundred Fifty Thousand Dollars ($350,000) in the form of a secured promissory
note payable in eighteen (18) fixed monthly installments and accruing interest
at the rate of six percent (6%) per annum.
  (c)  An
amount equal to the book value of the fixed assets prior to the Closing, in the
form of a secured promissory note.
 (d) An
earn-out payment in the amount of Three Hundred Fifty Thousand Dollars
($350,000) (subject to  adjustment based on Gross Profits from the
Business), payable in six (6) consecutive, equal, quarterly
installments,
 (e)  An
amount equal to the book value of the Product Inventory determined prior to the
Closing, in the form of a secured promissory note, payable in twelve (12)
fixed monthly installments and accruing interest at the rate of six percent (6%)
per annum.
 (f)  One
Million Five Hundred Fifty Thousand (1,550,000) shares of the unregistered
common stock, with a par value $0.01 per share.




The
consideration had been allocated to assets and liabilities based internal
assessments with $250,000 initially allocated to goodwill.


F-16
 Table of Contents




NOTE 8 -
GOODWILL AND OTHER INTANGIBLE ASSETS




The
Company is seeking to hire a third-party company to prepare a valuation to
assist management of the Company in its allocation of the purchase price,
primarily through the determination of the fair value and remaining useful lives
of the 2008 Acquisitions' respective intangible assets. As of December 31, 2008
the Company recorded intangible assets for a total amount of $2,190,500, upon
the final results of the third-party valuation, management will prepare the
asset allocation of the respective intangible assets.





The
amortization expense for all intangible assets is grouped with the depreciation
expense for the related reporting period, and reported in the Statements of
Operations and the Statements of Cash Flows as “Depreciation and amortization”
expense. The Company calculates the weighted average of the average amortization
period, in total and by major define-lived intangible asset on a straight-line
basis over the estimated useful lives of the related assets that is ten years in
accordance with the agreements with the above intangible assets. The company had
total amortization expense of $36,625 in 2008.




NOTE 9 –
NOTE PAYABLES





Notes
payable consist of the following as of December 31:


2008
                    
                    
                    2007Secured
      promissory note (Fixed Assets) dated October 1, 2008 at an interest rate
      of 6.00% per annum until April 1, 2010.  Principal and interest
      are due in monthly payments of $9,514.27.
                    
                    $
                    145,948
                    
                    
                    $
                    -Secured
      promissory note (Component Inventory) dated October 1, 2008 at an interest
      rate of 6.00% per annum until October 1, 2009. Principal and interest are
      due in monthly payments of $25,114.01.
                    
                    
                    244,370
                    
                    
                    
                    -Secured
      promissory note (Installment) dated October 1, 2008 at an interest rate of
      6.00% per annum until October 1, 2010.  Principal and interest
      are due in quarterly payments of $20,381.11.
                    
                    
                    312,645
                    
                    
                    
                    -Other
      notes payable
                    
                    
                    350,000
                    
                    
                    
                    -Total
      of Notes Payable
                    
                    
                    1,052,963
                    
                    
                    
                    -Less
      Current Portion
                    
                    
                    (934,861
                    )
                    
                    
                    -Long-Term
      Portion
                    
                    $
                    118,102
                    
                    
                    $
                    -




Annual
maturities of notes payables are as follows for the years ending December
31:





2009
                
                $
                934,8612010
                
                
                118,102$
                1,052,963  F-17
 Table of
Contents




NOTE 10 –
SHARE CAPITAL





On July
26, 2005, the Company authorized 75,000,000 shares of common stock, at $.01 par
value and as of December 31, 2008 25,839,928 common shares were issued and
outstanding.  In August 2006, the Company authorized 10,000,000 of
preferred series A shares at a par value of .01 and 5,659,477 shares were issued
and outstanding as of December 31, 2008.  In June 2008, the Company
authorized 1000 of preferred series B shares that are 10% Cumulative Perpetual
with a State Value of $10,000 per share.





Effective
February 26, 2007, the Company closed the initial phase on its
financing.  The offering consisted of the sale of up to 1,000,000
units (“Units”) each Unit consisting of one share of the Company’s common stock
and one warrant to purchase shares of the Company’s common stock at $3.00 per
share, at a price of $2.00 per Unit.  The Company issued 1,238,600 in
warrants related to this initial phase financing.




The fair
value of each warrant grant was estimated on the date of grant using the
Black-Scholes option-pricing model with the following assumptions for year ended
December 31, 2008 and 2007:





Warrants
                
                
                Strike
                
                DateDate
      issued
                
                Issued
                
                
                Price
                
                ExpiredJanuary
      31, 2008
                
                
                1,875,000
                
                
                
                1.50
                
                January
      31, 2013June
      30, 2008
                
                
                1,952,359
                
                
                
                1.25
                
                June
      30, 2013June
      30, 2008
                
                
                634,516
                
                
                
                1.10
                
                June
      30, 2013December
      31, 2008
                
                
                1,900,000
                
                
                
                0.375
                
                December
      31, 2013Total
      Warrants Issued
                
                
                6,361,875






Dividend
      yield
                
                NoneVolatility
                
                
                0.491Risk
      free interest rate
                
                
                4.18
                %Expected
      asset life
                
                5
      years





The
Company valued the warrants using Black-Scholes option-pricing
model.  The assumptions under Black Scholes are based on the market
value of the stock price at the time of issuance, the exercise price of the
warrants, life, volatility, risk free interest rate of the
warrants.  The Black Scholes option-price model was the best
determinable value of the warrants that the Company “knew up front” when issuing
the warrants in accordance with EITF 96-18.  The warrants had no
vesting schedule and could be exercised at the option of the parties receiving
the warrants until either terminated by contract or expiration.  No
discounts were applied to the calculation through the Black Scholes option-price
model. F-18
 Table of Contents





Common
Stock


Years
      Ended
                      
                      Stock
      issuedfor
      Cash
                      
                      
                      Cash
      Received
                      
                      
                      Stock
      forConversion
      of Debt
                      
                      
                      Stock
      issued forStock
      Split
                      
                      
                      Stock
      issuedand cancelledfor
      servicesDecember
      31, 2007
                      
                      
                      2,014,000
                      
                      
                      $
                      1,651,000
                      
                      
                      
                      1,878,600
                      
                      
                      
                      9,067,225
                      
                      
                      
                      2,517,625December
      31, 2008
                      
                      
                      4,301,933
                      
                      
                      $
                      4,157,477
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      1,766,022





2007





During
the year ended December 31, 2007, the Company has issued shares of its common
stock as consideration to consultants for the fair value of the services
rendered.  The value of those shares is determined based on the
trading value of the stock at the dates on which the agreements were into for
the services and the value of services rendered.   During the
year ended December 31, 2007, the Company granted to consultants, 2,517,625
shares of common stock valued in the aggregate at $3,109,477 with a strike price
of par value since the Company was not trading its common stock.





During
the year ended December 31, 2007, the Company issued 2,014,000 shares of its
common stock for $1,651,000.  The shares were issued to third parties
in a private placement of the Company’s common stock.  The shares were
sold throughout the year ended December 31, 2007, at $.82 through $1.00 per
share at the end of the year when the shares were sold.





During
year ended December 31, 2007, the Company issued 1,238,600 shares of its common
stock for the conversion of debt in the amount of $815,000 plus accrued interest
of $24,313 with the total conversion of $839,313.  The Company issued
230,000 common shares for the conversion of debt from the accrued salary of the
Company’s CEO of $230,000.  Also the Company issued 410,000 common
shares for the conversion of affiliate debt of $119,606.  All of these
conversions were non-cash transactions as reflected in the statement of Cash
Flow.  The Company issued 1,238,600 in warrants in connection with
this conversion of debt.





2008





During
the year ended December 31, 2008, the Company issued 3,642,456 shares of its
common stock for $3,498,000.  Included in the 3,642,456 of shares
issued the Company issued separately 3,000,000 of its shares in a private
placement memorandum that funded the Company on June 26, 2008.  The
Company had cost of raising capital of $250,713 that was paid to brokers and
attorneys.  The Company issued 1,800,000 warrants as the cost of
raising capital that had a strike price of $1.25. F-19
 Table of Contents





There
were no options granted in the year ended December 31, 2008.  The
Company had a total of 3,038,600 warrants outstanding as of December 31, 2008
with 1,238,600 having a strike price of $1.00 and 1,800,000 having a strike
price of $1.25.  These warrants have a five year life which expires
2012 and 2013 respectively. The shares were issued to third parties in a private
placement of the Company’s common stock.  The shares were sold
throughout the year ended December 31, 2008, at $.82 through $1.00 per share at
the end of the year when the shares were sold.





During
the year ended December 31, 2008, the Company has issued shares of its common
stock as consideration to consultants for the fair value of the services
rendered.  The value of those shares is determined based on the
trading value of the stock at the dates on which the agreements were into for
the services and the value of services rendered.   During the
year ended December 31, 2008, the Company granted to consultants, 1,340,522
shares of common stock valued in the aggregate at $1,531,793 with a strike price
of par value since the Company was not trading its common stock.  The
Company cancelled 1,124,500 common shares from consultants that surrendered
their shares to the Company.




During
the year ended December 31, 2008, the Company has issued 1,550,000 shares of its
common stock as consideration in the Asset Purchase Agreement between the
Company and NDS Nutritional Products, Inc. for the fair value of
$790,500.  The value of those shares is determined based on the
trading value of the stock at the dates on which the agreements were into for
the services and the value of services rendered.




Subscribed
Common and Preferred Stock




The
Company issued Preferred A shares of 4,000,000 at a $.15 value at the date of
issuance.  The Preferred A shares were issued to consultants for services
rendered for the company.




The
Company issued Preferred B shares of 125 shares at a $10,000 per share
value.  These preferred shares are cumulative and perpetual preferred
shares.  Along with the Preferred B shares the Company issued 7,500,000
common shares in the same transactions.  The Company issued these
subscribed shares for $1,250,000 in cash, we allocated the price of these shares
between Preferred B of a value of $208 and Common Stock as
$1,249,792.


F-20
 Table of Contents




Preferred
Stock





Preferred
Series A





During
the year ended December 31, 2008, the Company issued 659,477 Preferred Series A
for $659,477.  On December 29, 2008, the Company memorialized the
issuance of 4,000,000 Preferred Series A stock, which were previously designated
but not issued, and issued the Preferred Series A stock in January,
2009.





Preferred
Series B





During
the year ended December 31, 2008 the Company has subscribed common stock of
7,500,000 and Preferred Series B stock of 125.  These common and
preferred shares were issued in a related agreement with Viscis Capital Master
Fund where $1,250,000 was received and the preferred and common shares issued
were allocated based upon the purchase price of the shares.





The
Preferred Series B shares designate 1,000 shares authorize at $.01 par value per
share, as 10% Cumulative Perpetual Series B Preferred Stock.  Each
share of Series B Preferred Stock has a stated value of $10,000 per shares, a
liquidation preference equal to the Stated Value, and is
non-convertible.





NOTE 11 -
INCOME TAXES





The
provision (benefit) for income taxes from continued operations for the years
ended December 31, 2008 and 2007 consist of the following:


December
      31,2008
                    
                    
                    2007Current:Federal
                    
                    $
                    -
                    
                    
                    $
                    -State
                    
                    
                    -
                    
                    
                    
                    --
                    
                    
                    
                    -Deferred:Federal
                    
                    $
                    2,252,837
                    
                    
                    $
                    1,536,010State
                    
                    
                    589,713
                    
                    
                    
                    402,1732,842,550
                    
                    
                    
                    1,938,183Valuation
      allowance
                    
                    
                    (2,842,550
                    )
                    
                    
                    (1,938,183
                    )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
      31,2008
                  
                  
                  2007Statutory
      federal income tax rate
                  
                  
                  34.0
                  %
                  
                  
                  34.0
                  %State
      income taxes and other
                  
                  
                  8.9
                  %
                  
                  
                  8.9
                  %Valuation
      allowance
                  
                  
                  (42.9
                  %)
                  
                  
                  (42.9
                  %)Effective
      tax rate
                  
                  
                  -
                  
                  
                  
                  -


F-21
 Table of Contents




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
      31,2008
                    
                    
                    2007Net
      operating loss carryforward
                    
                    
                    2,842,550
                    
                    
                    
                    1,938,183Valuation
      allowance
                    
                    
                    (2,842,550
                    )
                    
                    
                    (1,938,183
                    )Deferred income tax
      asset
                    
                    $
                    -
                    
                    
                    $
                    -





The
Company has a net operating loss carryforward of approximately $11,402,606
available to offset future taxable income through 2028.





NOTE 12 -
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.





NOTE 13 -
RELATED PARTY TRANSACTIONS





The
Company is managed by its key shareholder.  This shareholder is the
sole shareholder of Small World Traders.  The Company entered into
Demand Note Payable with Bershert LLC and affiliate for $50,000 bearing an
interest rate of 8%.  The note matures on March 22, 2009.





NOTE 14 -
NET LOSS PER SHARE





Restricted
shares and warrants are included in the computation of the weighted average
number of shares outstanding during the periods.  The net loss per
common share is calculated by dividing the consolidated loss by the weighted
average number of shares outstanding during the periods.





NOTE 15 -
SUBSEQUENT EVENTS





The
Company entered into to two new employment agreements with key employees with
substantial distribution experience.





*  *  *  *  *  *  F-22
 Table of Contents


ITEM9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.




We have
no changes or disagreements with our auditors.





ITEM9A. CONTROLS AND PROCEDURES




Our
management team, under the supervision and with the participation of our
principal executive officer and our principal financial officer, evaluated the
effectiveness of the design and operation of our disclosure controls and
procedures as such term is defined under Rule 13a-15(e) promulgated under
the Securities Exchange Act of 1934, as amended (Exchange Act), as of the last
day of the fiscal period covered by this report, May 31, 2008. The term
disclosure controls and procedures means our controls and other procedures that
are designed to ensure that information required to be disclosed by us in the
reports that we file or submit under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the SEC’s rules
and forms. Disclosure controls and procedures include, without limitation,
controls and procedures designed to ensure that information required to be
disclosed by us in the reports that we file or submit under the Exchange Act is
accumulated and communicated to management, including our principal executive
and principal financial officer, or persons performing similar functions, as
appropriate to allow timely decisions regarding required disclosure. Based on
this evaluation, our principal executive officer and our principal financial
officer concluded that our disclosure controls and procedures were effective as
of December 31, 2008.




Our
principal executive officer and our principal financial officer, are responsible
for establishing and maintaining adequate internal control over financial
reporting, as such term is defined in Exchange Act Rules 13a-15(f).
Management is required to base its assessment of the effectiveness of our
internal control over financial reporting on a suitable, recognized control
framework, such as the framework developed by the Committee of Sponsoring
Organizations (COSO). The COSO framework, published in Internal Control-Integrated
Framework, is known as the COSO Report. Our principal executive officer
and our principal financial officer, have has chosen the COSO framework on which
to base its assessment. Based on this evaluation, our management concluded that
our internal control over financial reporting was effective as of December 31,
2008.




This
annual report on Form 10-K does not include an attestation report of our
registered public accounting firm regarding internal control over financial
reporting. Management’s report was not subject to attestation by our registered
public accounting firm pursuant to temporary rules of the Securities and
Exchange Commission that permit us to provide only management’s report in this
annual report on Form 10-K.




There
were no changes in our internal control over financial reporting that occurred
during the last quarter of 2008 that have materially affected, or are reasonably
likely to materially affect, our internal control over financial
reporting.




This
annual report does not include an attestation report of the company’s registered
public accounting firm regarding internal control over financial reporting. Our
principal executive officer and our principal financial officer, report was not
subject to attestation by the company’s registered public accounting firm
pursuant to temporary rules of the Securities and Exchange Commission that
permit the company to provide only management’s report in this annual
report.




It should
be noted that any system of controls, however well designed and operated, can
provide only reasonable and not absolute assurance that the objectives of the
system are met. In addition, the design of any control system is based in part
upon certain assumptions about the likelihood of certain events. Because of
these and other inherent limitations of control systems, there can be no
assurance that any design will succeed in achieving its stated goals under all
potential future conditions, regardless of how remote.


-21-
 Table of Contents





Changes in Internal Control Over Financial Reporting




During
the fiscal year ended December 31, 2008, there were no changes in our internal
control over financial reporting that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.




LACK
OF INDEPENDENT BOARD OF DIRECTORS AND AUDIT COMMITTEE




Management
is aware that an audit committee composed of the requisite number of independent
members along with a qualified financial expert has not yet been
established.  Considering the costs associated with procuring and
providing the infrastructure to support an independent audit committee and the
limited number of transactions, Management has concluded that the risks
associated with the lack of an independent audit committee are not
justified.  Management will periodically reevaluate this
situation.





LACK
OF SEGREGATION OF DUTIES




Management
is aware that there is a lack of segregation of duties at the Company due to the
small number of employees dealing with general administrative and financial
matters. However, at this time management has decided that considering the
abilities of the employees now involved and the control procedures in place, the
risks associated with such lack of segregation are low and the potential
benefits of adding employees to clearly segregate duties do not justify the
substantial expenses associated with such increases.  Management will
periodically reevaluate this situation.





ITEM9B. OTHER
INFORMATION




None.




-22-
 Table of Contents


PARTIII





ITEM10.  DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE
GOVERNANCE.





Director
and Executive Officer





Set forth
below is information regarding the Company’s current directors and executive
officers. There are no family relationships between any of our directors or
executive officers. The directors are elected annually by stockholders. The
executive officers serve at the pleasure of the Board of Directors.





Name
                
                Age
                
                TitleScott
      Landow
                
                53
                
                President
      and Chief Executive Officer, Director, Principle Accounting
      OfficerJohn
      Wilson
                
                45
                
                President
      of Fusion Premium Energy, Inc.Scott
      Solcum
                
                40
                
                Executive
      of Fusion Premium Energy, Inc.Ryan
      Zink
                
                42
                
                President
      of NDS Nutritional
Products





The
background and principal occupations of the director and officers of the Company
are as follows:





Scott D. Landowis 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.




Executives:




John Wilson is the President
of Fusion Premium Energy, Inc. with over seventeen years of invaluable
experience at both Coca-Cola and Coca-Cola Enterprises. Most recently, Mr.
Wilson was responsible for negotiating exclusive bottling agreements with
national customers on behalf of all seventy-three of the Coca-Cola Bottlers in
the United States.




Scott Slocum an executive of Fusion with over
24 years experience in the beverage industry including numerous leadership roles
within Coca-Cola Enterprises.  Mr. Slocum’s strength is his vast
experience in the areas of channel distribution, customer management, as well as
operations logistics.




Ryan Zink President of NDS
Nutritional Products, Inc. is a highly motivated and profitability minded
executive with an extensive background in nutritional supplements and functional
foods wholesale and retail.  Mr. Zink has proven experience in driving
sales and profitability through improved operational efficiencies and more
importantly, sales growth.  He is a talented leader at creating a
buy-in attitude from management teams and skilled at viewing an organization as
a whole rather than a sum of its parts.  A strong belief in objectives
management with compensation rewards as a direct effect of meeting those
objectives.  Core competencies include:  Sales Growth,
Operational Analysis, Budgeting, Relationship Building, Accountability
Management, Cost Reductions, Communication Skills, Product Development, Cash
Management, Marketing Strategies, Inventory Management, and Negotiating
Capabilities.





Audit
Committee Financial Expert





The
Company does not have an audit committee or a compensation committee of its
board of directors. In addition, the Company’s board of directors has determined
that the Company does not have an audit committee financial expert serving on
the board. When the Company develops its operations, it will create an audit and
a compensation committee and will seek an audit committee financial expert for
its board and audit committee.


-23-
 Table of Contents




Conflicts
of Interest





Members
of our management are associated with other firms involved in a range of
business activities.  Consequently, there are potential inherent
conflicts of interest in their acting as officers and directors of our
company.  Although the officers and directors are engaged in other
business activities, we anticipate they will devote an important amount of time
to our affairs.





Our
officers and directors are now and may in the future become shareholders,
officers or directors of other companies, which may be formed for the purpose of
engaging in business activities similar to ours.  Accordingly,
additional direct conflicts of interest may arise in the future with respect to
such individuals acting on behalf of us or other entities.  Moreover,
additional conflicts of interest may arise with respect to opportunities which
come to the attention of such individuals in the performance of their duties or
otherwise.  Currently, we do not have a right of first refusal
pertaining to opportunities that come to their attention and may relate to our
business operations.





Our
officers and directors are, so long as they are our officers or directors,
subject to the restriction that all opportunities contemplated by our plan of
operation which come to their attention, either in the performance of their
duties or in any other manner, will be considered opportunities of, and be made
available to us and the companies that they are affiliated with on an equal
basis.  A breach of this requirement will be a breach of the fiduciary
duties of the officer or director.  If we or the companies with which
the officers and directors are affiliated both desire to take advantage of an
opportunity, then said officers and directors would abstain from negotiating and
voting upon the opportunity.  However, all directors may still
individually take advantage of opportunities if we should decline to do
so.  Except as set forth above, we have not adopted any other conflict
of interest policy with respect to such transactions.





Compliance
with Section 16(A) Of The Exchange Act 9.A. Directors And Executive Officers,
Promoters, And Control Persons:





The
Company is aware that all filings of Form 4 and 5 required of Section 16(a) of
the Exchange Act of Directors, Officers or holders of 10% of the Company's
shares have not been timely and the Company has instituted procedures to ensure
compliance in the future.




Code
of Ethics




We have
adopted a code of ethics that applies to all of our executive officers,
directors and employees. Code of ethics codifies the business and ethical
principles that govern all aspects of our business. This document will be made
available in print, free of charge, to any shareholder requesting a copy in
writing from the Company and it attached hereto as Exhibit 14.1




ITEM11.  EXECUTIVE COMPENSATION





General.Mr. Scott
Landow serves as the Company’s sole-director and chief executive
officer.  Pursuant to a Management Services Agreement executed and
approved by the Company Mr. Landow was compensated approximately $120,000
(deferring an additional $80,000 per year), and $6,000 for fringe benefits, and
other sources or forms of compensation was not paid or collected for Fiscal year
ended 2007 and 2008.   As of December 31, 2008 the company has
deferred compensation of $280,000  Further Mr. Landow receives
cashless warrants of 350,000 per year until the company begins paying his full
salary.





Summary
Compensation Table




The
following table sets forth for the year ended December 31, 2008 and 2007
compensation awarded to, paid to, or earned by, Mr. ScottLandow,our sole Director and Chief Executive
Officer, andour other most highly
compensated executive officers whose total compensation during the last fiscal
year exceeded $100,000, if any.   Scott Landow defers $80,004 per
year in his salary and has accrued unpaid salary of $280,000.  While
Mr. Landow defers his salary he is granted 350,000 in common stock warrants at
$.375 strike price.


-24-
 Table of Contents





2008
and 2007 SUMMARY COMPENSATION TABLE


Name
      and Principal Position
                      Year
                      
                      Salary ($)
                      
                      Bonus ($)
                      
                      Stock
                        Awards
                        ($)
                      
                      
                      Option
                        Awards
                        ($)
                      
                      
                      Non-Equity
                        Incentive
      Plan
                        Compensation
                        ($)
                      
                      Change
      in
                        Pension
                        Value
      and
                        Nonqualified
                        Deferred
                        Compensation
                        Earnings
                        ($)
                      
                      
                      All
      Other
                        Compen-sation
                        ($)
                      
                      
                      Total
                        ($)Scott
                      2008
                      
                      
                      120,000
                      
                      
                      
                      
                      0
                      
                      
                      
                      0
                      
                      
                      
                      0
                      
                      
                      
                      0
                      
                      
                      
                      6,000
                      
                      
                      
                      126,000Landow
                      2007
                      
                      
                      120,000
                      
                      
                      
                      
                      0
                      
                      
                      
                      0
                      
                      
                      
                      0
                      
                      
                      
                      0
                      
                      
                      
                      6,000
                      
                      
                      
                      126,000








2008
and 2007 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE




Option
      Awards
                              
                              
                              Stock
      AwardsNumber
      of
                                Securities
                                Underlying
                                Unexercised
                                Options
                                (#)
      Exercisable
                              
                              
                              Number
      of
                                Securities
                                Underlying
                                Unexercised
                                Options
                                (#)
      Unexercisable
                              
                              
                              Equity
                                Incentive
                                Plan Awards:
                                Number
      of
                                Securities
                                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
                                ($)NameScott
                                Landow
                              
                              
                              0
                              
                              
                              
                              0
                              
                              
                              
                              0
                              
                              
                              
                              0
                              
                              
                              
                              0
                              
                              
                              
                              0
                              
                              
                              
                              0
                              
                              
                              
                              0
                              
                              
                              
                              0


-25-
 Table of Contents




2008
and 2007 OPTION EXERCISES AND STOCK VESTED TABLE




Option
      Awards
                      
                      Stock
      AwardsName
                      
                      Number
      of Shares Acquired on Exercise (#)
                      
                      Value Realized on Exercize
      (#)
                      
                      Number
      of Shares Acquired on Voting (#)
                      
                      Value
      Realized on Vesting ($)Scott
      Landow 2007
                      
                      0
                      
                      0
                      
                      0
                      
                      0Scott
      Landow 2008
                      
                      0
                      
                      0
                      
                      0
                      
                      0






2008
and 2007 PENSION BENEFITS TABLE


Name
                        
                        Plan
                          Name
                        
                        Number of
                          Years
                          Credited
      Service
                          (#)
                        
                        Present
                          Value
      of Accumulated
                          Benefit
                          ($)
                        
                        Payments During Last
                          Fiscal
      Year
                          ($)Scott
      Landow
                        
                        
                        
                        0
                        
                        0
                        
                        0







2008
and 2007 NONQUALIFIED DEFERRED COMPENSATION TABLE


Name
                                
                                Executive
                                  Contributions
                                  in
      Last Fiscal Year
                                  ($)
                                
                                
                                Registrant
                                  Contributions
                                  in Last
                                  Fiscal
      Year
                                  ($)
                                
                                
                                Aggregate Earnings
                                  in
      Last Fiscal Year
                                  ($)
                                
                                
                                Aggregate
                                  Withdrawals /
                                  Distributions
                                  ($)
                                
                                
                                Aggregate Balance at
                                  Last
      Fiscal Year-End
                                  ($)Scott
      Landow
                                
                                
                                0
                                
                                
                                
                                0
                                
                                
                                
                                0
                                
                                
                                
                                0
                                
                                
                                
                                0







2008
and 2007 DIRECTOR COMPENSATION TABLE


Name
                  
                  Fees
                    Earned or
      Paid in
                    Cash
                    ($)
                  
                  
                  Stock Awards
                    ($)
                  
                  
                  Option
                    Awards
                    ($)
                  
                  
                  Non-Equity
                    Incentive
      Plan Compensation
                    ($)
                  
                  
                  Change
                    in
      Pension
                    Value
      and
                    Nonqualified
                    Deferred
                    Compensation
                    Earnings
                    ($)
                  
                  
                  All
      Other Compensation
                    ($)
                  
                  
                  Total
                    ($)Scott
      Landow
                  
                  
                  0
                  
                  
                  
                  0
                  
                  
                  
                  0
                  
                  
                  
                  0
                  
                  
                  
                  0
                  
                  
                  
                  0
                  
                  
                  
                  0




-26-
 Table of Contents




2008
and 2007 ALL OTHER COMPENSATION TABLE


Name
                  Year
                  
                  Perquisites
                    and
      Other
                    Personal
                    Benefits
                    ($)
                  
                  Tax
                    Reimbursements
                    ($)
                  
                  
                  Insurance
                    Premiums
                    ($)
                  
                  
                  Company
                    Contributions
                    to Retirement
                    and
                    401(k)
      Plans
                    ($)
                  
                  
                  Severance
                    Payments /
                    Accruals
                    ($)
                  
                  
                  Change
                    in Control
                    Payments /
                    Accruals
                    ($)
                  
                  
                  Total ($)Scott
                  2007
                  
                  
                  0
                  
                  
                  
                  0
                  
                  
                  
                  0
                  
                  
                  
                  0
                  
                  
                  
                  0
                  
                  
                  
                  0
                  
                  
                  
                  0Landow
                  2008
                  
                  
                  0
                  
                  
                  
                  0
                  
                  
                  
                  0
                  
                  
                  
                  0
                  
                  
                  
                  0
                  
                  
                  
                  0
                  
                  
                  
                  0







2008
and 2007 PERQUISITES TABLE


Name
                          Year
                          
                          
                          Personal Use of
                            Company
                            Car/Parking
                          
                          
                          Financial Planning/
                            Legal
      Fees
                          
                          
                          Club Dues
                          
                          
                          Executive Relocation
                          
                          
                          Total Perquisites
                            and
                            Other Personal
                            BenefitsScott
                          
                          2007
                          
                          
                          
                          0
                          
                          
                          
                          0
                          
                          
                          
                          0
                          
                          
                          
                          0
                          
                          
                          
                          0Landow
                          
                          2008
                          
                          
                          
                          0
                          
                          
                          
                          0
                          
                          
                          
                          0
                          
                          
                          
                          0
                          
                          
                          
                          0







2008
and 2007 POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
TABLE


Name
                          Benefit
                          Before
                            Change in
                            Control
                            Termination
                            w/o Cause
      or for
                            Good
      Reason
                          After Change in
                            Control
                            Termination w/o Cause
      orfor GoodReason
                          Voluntary
                            Termination
                          Death
                          Disability
                          
                          Change in
                            ControlScott
      Landow
                          Basic salary
                          
                          
                          
                          
                          
                          
                          
                          -




Eric
Schick resigned from the Company in October 2008 and is no longer with the
Company.


-27-
 Table of Contents




Compensation
of Directors





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.





ITEM12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT.




The
following table lists stock ownership of our Common Stock as of March 26, 2009,
based on 33,098,261 shares of common stock issued and
outstanding.  The information includes beneficial ownership by (i)
holders of more than 5% of our Common Stock, (ii) each of two directors and
executive officers and (iii) all of our directors and executive officers as a
group. Except as noted below, to our knowledge, each person named in the table
has sole voting and investment power with respect to all shares of our Common
Stock beneficially owned by them.


Name
      and Address of Owner
                  Title
      of Class
                  
                  Number
                    of
      Shares
                    Owned
      (1)
                  
                  
                  Percentage
                    of
      ClassScott
      Landow
                    777
      South Highway 101, Suite 215
                    Solana
      Beach, CA  92975 (2)
                  Common
      Stock
                  
                  
                  6,280,400
                  
                  
                  
                  19.
                  %All
      Officers and Directors
                    As
      a Group (1 persons)
                  Common
      Stock
                  
                  
                  6,280,400
                  
                  
                  
                  19.
                  %Small
      World Traders(3)
                    777
      South Highway 101, Suite 215
                    Solana
      Beach, CA  92975
                  Common
      Stock
                  
                  
                  2,740,000
                  
                  
                  
                  8.27
                  %WWFD
      LLC(4)
                    777
      South Highway 101, Suite 215
                    Solana
      Beach, CA  92975
                  Common
      Stock
                  
                  
                  2,950,000
                  
                  
                  
                  8.9
                  %Vicis
      Capital Master Fund(5)
                    445
      Park Ave 16th
      Floor
                    New
      York, NY  10022
                  Common
      Stock
                  
                  
                  9,840,523
                  
                  
                  
                  29.7
                  %





(1) Beneficial
ownership is determined in accordance with the rules of the Securities and
Exchange Commission and generally includes voting or investment power with
respect to securities.


(2) Includes
shares held byfamily members and family trusts such as WWFD LLC and shares
held by Small World
Traders.


(3) Scott
Landow is the managing member of WWFD LLD, a Nevada
LLC.


(4) Small
World Traders is controlled by Scott Landow.
 (5) Vicis
Capital Master Fund is controlled by Keith Hughes




Changes
in Control




We are
not aware of any arrangements that may result in a change in control of the
Company.


-28-
 Table of Contents




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 A stock, 1,000 designated
preferred series B 1,000 at $.01 par value, 10% Cumulative Perpetual preferred
shares.




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. 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.




Voting
Rights





Each
holder of Common Stock is entitled to one vote for each share of Common Stock
held on all matters submitted to a vote of stockholders.





Dividends





Subject
to preferences that may be applicable to any then-outstanding shares of
Preferred Stock, if any, and any other restrictions, holders of Common Stock are
entitled to receive ratably those dividends, if any, as may be declared from
time to time by the Company’s board of directors out of legally available funds.
The Company and its predecessors have not declared any dividends in the past.
Further, the Company does not presently contemplate that there will be any
future payment of any dividends on Common Stock.





Preferred
Stock Series A




We are
authorized to issue 10,000,000 shares of preferred stock, $.01 par value, of
which 5,659,477 are issued and outstanding as of December 31,
2008.  We had subscribed preferred stock of 4,000,000 where the total
subscribed and outstanding of 9,659,477 as of December 31, 2008.





Preferred
Stock Series B




We
designated Preferred Series B shares designate 1,000 shares authorize at $.01
par value per share, as 10% Cumulative Perpetual Series B Preferred
Stock.  Each share of Series B Preferred Stock has a stated value of
$10,000 per shares, a liquidation preference equal to the Stated Value, and is
non-convertible.


Subscribed
Common and Preferred Stock
  The
Company issued Preferred A shares of 4,000,000 at a $.15 value at the date of
issuance. The Preferred A shares were issued to consultants for services
rendered for the company. -29-
 Table of Contents
  The
Company issued Preferred B shares of 125 shares at a $10,000 per share
value.  These preferred share are cumulative and perpetual preferred
shares. Along with the Preferred B shares the Company issued 7,500,000 common
shares in the same transactions. The Company issued these subscribed shares for
$1,250,000 in cash, we allocated the price of these shares between Preferred B
of a value of $208 and Common Stock as $1,249,792.




Options
and Warrants:




As of
December 31, 2008 there were no options to acquire shares of the Company’s
common stock outstanding, however there are 6,361,875 warrants outstanding that
expire in 2013.





Convertible
Securities





At
December 31, 2008, the Company converted all convertible notes to 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.





Transfer
Agent





On August
31, 2006, the Company engaged Colonial Transfer Agent to serve in the capacity
of transfer agent. Their mailing address and telephone number Colonial Stock
Transfer, 66 Exchange Place, Salt Lake City, UT 84111 - Phone is (801)
355-5740.





ITEM13.  CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS, AND DIRECTOR INDPENDENCE.





During
the year ended December 31, 2008 there were no related party
advances.  During the period July 26, 2005 (inception) through
December 31, 2008, certain officers and stockholders advanced loans to the
Company.  In addition, the CEO is entitled to receive an annual bonus
reflecting 40% of his then current salary, which he has elected to defer as
well as compensation of $280,000.  Presently any and all bonuses have
been deferred.





ITEM14.PRINCIPAL
ACCOUNTANT FEES AND SERVICES




Audit Fees. The aggregate
fees billed by Jewett, Schwartz, Wolfe & Associates for professional
services rendered for the audit of the Company’s annual financial statements for
fiscal years ended December 31, 2008 and 2007 approximated $17,000 and
$17,000 respectively.  The aggregate fees billed by Jewett, Schwartz,
Wolfe & Associates for the review of the financial statements included in
the Company’s Forms 10-Q for fiscal year 2008 and 2007 approximated $11,000 per
year.





Audit-Related
Fees.  The aggregate fees billed by Jewett, Schwartz, Wolfe
& Associates for assurance and related services that are reasonably related
to the performance of the audit or review of the Company’s financial statements
for the fiscal years ended December 31, 2008 and 2007, and that are not
disclosed in the paragraph captioned “Audit Fees” above, were $0 and $0,
respectively.





Tax Fees.The
aggregate fees billed by Jewett Schwartz Wolfe & Associates for
professional services rendered for tax compliance, tax advice and tax planning
for the fiscal year ended December 31, 2008 and 2007 were $0. -30-
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All Other Fees.  The
aggregate fees billed by Jewett Schwartz Wolfe & Associates for products and
services, other than the services described in the paragraphs “Audit Fees,”
“Audit-Related Fees,” and “Tax Fees” above for the fiscal years ended December
31, 2008 and 2007 approximated $17,000 and $17,000
respectively.





The Board
has received and reviewed the written disclosures and the letter from the
independent registered public accounting firm required by Independence Standards
Board Standard No. 1 (Independence Discussions with Audit Committees), and
has discussed with its auditors its independence from the Company. The Board has
considered whether the provision of services other than audit services is
compatible with maintaining auditor independence.




Based on
the review and discussions referred to above, the Board approved the inclusion
of the audited consolidated financial statements be included in the Company’s
Annual Report on Form 10-K for its 2008 fiscal year for filing with the
SEC.




The Board
pre-approved all fees described above.





PART IV





ITEM 15.  EXHIBITS AND REPORTS.




Exhibits


3.1
            
            Articles
      of Incorporation (1)3.2
            
            Amendments
      to Articles of Incorporation (1)3.1
            
            Bylaws
      of the Corporation (1)10.1
            
            Employment
      Agreement Scott Landow (1)10.2
            
            Securities
      Purchase Agreement (1)14.1
            
            Code
      of Ethics (2)21
            
            Subsidiaries
      (2)31.1
            
            Certification
      of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
      Act. (2)31.2
            
            Certification
      of Principal Financial and Accounting Officer Pursuant to Section 302 of
      the Sarbanes-Oxley Act. (2)32.1
            
            Certification
      of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley
      Act.  (2)32.2
            
            Certification
      of Chief Accounting Officer Pursuant to Section 906 of the Sarbanes-Oxley
      Act.  (2)


__________________________________________________





(1)  Incorporated by reference to the same exhibit filed with
Amendment No. 3 to the Company’s Registration Statement on Form SB2 (Commission
File No. 333-137170).


(2)  Filed
herein.


-31-
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ITEM 15: SIGNATURES





SIGNATURES





In
accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, there unto duly authorized.





Registrant
                Date:
      March 27, 2009
              
              Bond
      Laboratories, Inc.
                By: 
      /s/ Scott
      LandowScott LandowChairman, Chief Executive Officer (Principle Executive
      Officer)











Date:
      March 27, 2009
              
              By:
      /s/ Scott
      LandowScott LandowPrinciple Financial Officer






In
accordance with the Securities Exchange Act of 1934, this report has been signed
below by the following persons on behalf of the Company and in the capacities
and on the dates indicated.








Date:
      March 27, 2009
              
              By:
      /s/ Scott
      LandowScott LandowChairman, Chief Executive Officer (Principle Executive
      Officer),
                Director
      Principle Financial Officer