EX-99.1 6 a08-18837_1ex99d1.htm EX-99.1

 

Exhibit 99.1

 

 

 

 

FOR IMMEDIATE RELEASE

 

 

 

Contacts:

 

 

 

 

Stephen D. Axelrod, CFA

John Pougnet, CEO

 

Alisa Steinberg (Media)

XELR8 Holdings, Inc.

 

Wolfe Axelrod Weinberger Assoc. LLC

(303) 316-8577

 

(212) 370-4500

CEO@xelr8.com

 

steve@wolfeaxelrod.com

 

 

alisa@wolfeaxelrod.com

 

XELR8 HOLDINGS ANNOUNCES SECOND QUARTER AND SIX MONTHS FINANCIAL RESULTS

 

— Net Sales Show Sequential Increase of 44% Compared to First Quarter —

 

— Number of Participants at Quarter End was in Excess of 10,000 —

 

— Management to Host Conference Call Today at 11:00 a.m. ET —

 

DENVER, Colo. - August 5, 2008 — XELR8 Holdings, Inc. (AMEX: BZI), a provider of functional foods, beverages and nutritional supplements, announced today its financial results for the three and six months ended June 30, 2008.

 

Financial and operational highlights for second quarter and six months:

 

·                  Revenues increased 64% in the quarter and 71% in the six months period

 

·                  Gross profit was $1.8 million in the quarter and $3.0 million during the six months period, improvements of 72% and 88% respectively compared to same periods one year ago

 

·                  Growth in participants was 10,634 as of June 30, 2008, an 18% increase from Q1

 

·                  Cash and cash equivalents were $2.3 million as of June 30, 2008

 

Total revenue for the second quarter ended June 30, 2008 was $2.3 million, a 64% increase compared to total revenue of $1.4 million for the second quarter ended June 30, 2007. Gross profit grew to $1.8 million for the three months ended June 30, 2008, up 72% from $1.0 million in the prior year period. Gross margin in the quarter was 77%, an improvement from 74% in the same quarter one year ago, due to increased sales of Bazi, which carries a higher gross margin compared to the legacy products. Net loss for the three months ended June 30, 2008, decreased 30% to $0.61 million, or $(0.04) per share, compared to a loss of $0.88 million, or $(0.06) per share, in the prior year.

 

Total revenue for the six months ended June 30, 2008 was approximately $3.9 million, an increase of 71% compared to total revenue of $2.3 million for the six months period ended June 30, 2007. Gross profit improved to $3.0 million for the six months ended June 30, 2008, up 88% from $1.6 million in the prior year period. Gross margin in the six months period was 77%, an improvement from 70% in the same period one year ago, due to increased sales of Bazi, which carries a higher gross margin compared to the legacy products. Net loss for the six months ended June 30, 2008, decreased 39% to $1.36 million, or $(0.09) per share, compared to a loss of $2.24 million, or $(0.18) per share, in the prior year period.

 

- More -

 


 

The Company continues to remain well capitalized. As of June 30, 2008, cash and cash equivalents were approximately $2.3 million and the Company continues to be debt free. Net cash used by operating activities was minimal with $0.21 million used during the second quarter and $0.41 used during the six months period.

 

“I am pleased to report another record quarter,” said Mr. John Pougnet, Chief Executive Office of XELR8.  “During the second quarter the company experienced growth on multiple levels. Most importantly our participants exceeded a key level of 10,000. The number of participants was comprised of a growth in distributors to 6,264 and customers to 4,370, both showing sequential increases of 17% and 18% respectively in comparison to the first quarter figures.”

 

Mr. Pougnet continued, “Bazi represented 92% of sales in the second quarter and continues to be a valued product for our distributors. Bazi has proved to be well worth the Company’s investment and we are delighted to continually offer incentives and bonuses to our distributors for their attainment of significant sales growth in the product. We believe that recent sales promotions have assisted in our sales growth, including the most recent one: ‘XELR8 to a Million’. “

 

“We will continue to invest into the business by offering incentive programs in order to strengthen our distribution network as well as seek ways to expand it. We continue to remain highly focused on attaining profitability and believe we are near our goal of achieving positive cash flow,” concluded Mr. Pougnet.

 

There will be a conference call today at 11:00 a.m. ET with the investment community, featuring John Pougnet, Chief Executive Officer of XELR8 Holdings, Inc. Interested parties may participate in the call by dialing 877-407-8293; international callers dial 201-689-8349. In addition, a replay of the conference call will be available approximately two hours after the call has ended. The replay can be accessed at: www.xelr8tools.com/Media/ConfCall080508.mp3 and will be archived for 30 days.

 

About XELR8 Holdings, Inc.

 

XELR8 Holdings, Inc. is a provider of nutritional foods and beverages designed to help enhance physical health and overall performance. XELR8 has developed a comprehensive line of nutritional supplements and functional foods designed in systems that are easy to take, simple to understand, and conveniently fit within a lifestyle. These include the Company’s Eat/Drink/Snack System; Peak Performance System; and its newest market entry, Bazi™, a powerful, concentrated, antioxidant (Vitamins A, C & E) nutritional drink packed with eight different super fruits and berries, including the Chinese jujube plus 12 vitamins and 68 minerals, providing all the daily vitamins and minerals you need in a single, convenient, one-ounce shot.

 

XELR8’s commitment to quality, science and research has earned the Company a loyal following of over 350 world-class athletes and an elite list of endorsers, such as 3-time World Series Champion Curt Schilling, five-time Cy Young Award Winner Randy Johnson; Super Bowl Champions Mike Alstott, Lawyer Milloy and Head Coach Mike Shanahan; professional football superstar Cadillac Williams; Olympians Briana Scurry and Caroline Lalive; Stanley Cup Winner Blake Sloan; and PGA Tour Professional Tom Pernice, Jr. XELR8 products are only available through independent distributors located throughout the nation. For more information about XELR8, please visit www.xelr8.com or www.drinkbazi.com .

 

Forward-looking Statements

 

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including prospects for XELR8’s distribution network. Actual results may differ from those discussed in such forward-looking statements. These forward-looking statements include risks and uncertainties that include the Company’s ability to attract and retain distributors; changes in demand for the Company’s products; changes in the level of operating expenses; changes in general

 


 

economic conditions that impact consumer behavior and spending; product supply; the availability, amount, and cost of capital for the Company; and the Company’s use of such capital. More information about factors that potentially could affect the Company’s financial results is included in the Company’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-KSB for the year ended December 31, 2007 and all subsequent filings. Certain statements in this release regarding the Company’s agreements are in accordance with the guidelines established by the Federal Trade Commission for endorsements in advertising.

 

- Financial Tables to Follow -

 


 

XELR8 HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

June 30,

 

December 31,

 

 

 

2008

 

2007

 

 

 

(unaudited)

 

 

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

2,263,673

 

$

2,245,858

 

Accounts receivable, net of allowance for doubtful accounts of $10,130 and $12,231, respectively

 

2,390

 

7,460

 

Inventory, net of allowance for obsolescence of $181,256 and $189,403, respectively

 

322,478

 

370,843

 

Prepaid expenses and other current assets

 

498,172

 

329,015

 

Total current assets

 

3,086,713

 

2,953,176

 

 

 

 

 

 

 

Intangible assets, net

 

17,345

 

17,959

 

Property and equipment, net

 

57,201

 

81,405

 

 

 

 

 

 

 

Total assets

 

$

3,161,259

 

$

3,052,540

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable and accrued expenses

 

$

1,283,923

 

$

832,697

 

Short-term note payable

 

—

 

—

 

 

 

 

 

 

 

Total Liabilities

 

1,283,923

 

832,697

 

 

 

 

 

 

 

Commitments and Contingencies

 

 

 

 

 

 

 

 

 

 

 

SHAREHOLDERS’ EQUITY:

 

 

 

 

 

Preferred stock, authorized 5,000,000 shares, $.001 par value, none issued or outstanding

 

—

 

—

 

Common stock, authorized 50,000,000 shares, $.001 par value, 15,697,170 and 15,197,170 shares issued and outstanding respectively

 

15,697

 

15,197

 

Additional paid in capital

 

23,715,986

 

22,696,657

 

Accumulated (deficit)

 

(21,854,347

)

(20,492,011

)

 

 

 

 

 

 

Total shareholders’ equity

 

1,877,336

 

2,219,843

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

3,161,259

 

$

3,052,540

 

 

- More -

 


 

XELR8 HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

Three and Six Months Ended June 30, 2008 and 2007

 

 

 

For the Three
Months Ended

 

For the Six
Months Ended

 

 

 

June 30, 2008

 

June 30, 2007

 

June 30, 2008

 

June 30, 2007

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

2,276,415

 

$

1,386,395

 

$

3,854,199

 

$

2,255,470

 

Cost of goods sold

 

523,482

 

366,939

 

883,060

 

672,531

 

Gross profit

 

1,752,933

 

1,019,456

 

2,971,139

 

1,582,939

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Selling and marketing expenses

 

1,614,161

 

967,853

 

2,704,953

 

1,597,119

 

General and administrative expenses

 

752,173

 

937,289

 

1,621,058

 

1,786,810

 

Research and development expenses

 

2,087

 

4,517

 

2,512

 

5,130

 

Depreciation and amortization

 

11,844

 

22,497

 

23,687

 

34,276

 

Total operating expenses

 

2,380,265

 

1,932,156

 

4,352,210

 

3,423,335

 

 

 

 

 

 

 

 

 

 

 

Net (loss) from operations

 

(627,332

)

(912,700

)

(1,381,071

)

(1,840,396

)

Other income (expense)

 

 

 

 

 

 

 

 

 

Interest income

 

14,358

 

31,917

 

33,636

 

35,043

 

Other expenses

 

—

 

—

 

(13,770

)

—

 

(Loss) on disposal of asset

 

—

 

—

 

(1,130

)

—

 

Interest (expense)

 

—

 

—

 

—

 

(439,537

)

 

 

 

 

 

 

 

 

 

 

Total other income (expense)

 

14,358

 

31,917

 

18,736

 

(404,494

)

 

 

 

 

 

 

 

 

 

 

Net (loss)

 

$

(612,974

)

$

(880,783

)

$

(1,362,335

)

$

(2,244,890

)

 

 

 

 

 

 

 

 

 

 

Net (loss) per common share

 

 

 

 

 

 

 

 

 

Basic and diluted net (loss) per share

 

$

(0.04

)

$

(0.06

)

$

(0.09

)

$

(0.18

)

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding, basic and diluted

 

15,697,170

 

14,603,763

 

15,515,851

 

12,699,948

 

 

- More -

 


 

XELR8 HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

Six Months Ended June 30, 2008 and 2007

 

 

 

June 30

 

June 30

 

 

 

2008

 

2007

 

Cash flows from operating activities:

 

 

 

 

 

Net income (loss)

 

$

(1,362,335

)

$

(2,244,890

)

Adjustments to reconcile

 

 

 

 

 

Depreciation and amortization

 

23,687

 

34,276

 

Loss on disposal of asset

 

1,130

 

—

 

Stock and stock options issued for services

 

566,856

 

1,011,132

 

Expense related to anti-dilution of warrants

 

13,770

 

—

 

Interest expense and amortization related to bridge loan financing

 

—

 

428,889

 

Change in allowance for doubtful accounts

 

(2,101

)

5,629

 

Change in allowance for inventory obsolescence

 

(8,147

)

41,661

 

Change in allowance for product returns

 

26,147

 

30,866

 

Changes in assets and liabilities:

 

 

 

 

 

Accounts receivable

 

7,171

 

(8,835

)

Inventory

 

56,512

 

16,634

 

Other current assets

 

(169,157

)

(17,601

)

Accounts payable and accrued expenses

 

425,079

 

239,415

 

Net cash (used) by operating activities

 

(421,388

)

(462,824

)

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

Proceeds from maturity of investments

 

—

 

—

 

Capital expenditures

 

—

 

(10,408

)

Net cash (used) by investing activities

 

—

 

(10,408

)

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

Proceeds from bridge loan financing

 

—

 

250,000

 

Repayments of bridge financing

 

—

 

(500,000

)

Issuance of common stock

 

439,203

 

3,632,834

 

Net cash provided from financing activities

 

439,203

 

3,382,834

 

 

 

 

 

 

 

NET INCREASE (DECREASE) IN CASH

 

17,815

 

2,909,602

 

CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD

 

2,245,858

 

76,147

 

CASH AND CASH EQUIVALENTS, END OF THE PERIOD

 

$

2,263,673

 

$

2,985,749

 

 

 

 

 

 

 

SUPPLEMENTAL CASH FLOW DISCLOSURES

 

 

 

 

 

Cash paid for interest

 

$

—

 

$

13,425

 

Stock issued for satisfaction of accrued compensation expense

 

$

—

 

$

540,000

 

Deferred offering costs applied against proceeds from offering

 

$

—

 

$

25,000

 

 

###