EX-99.1 6 a08-25523_1ex99d1.htm EX-99.1

Exhibit 99.1

 

 

 

 

FOR IMMEDIATE RELEASE

 

 

 

 

 

 

Contacts:

 

Stephen D. Axelrod, CFA

 

 

Alisa Steinberg (Media)

John Pougnet, CEO

 

Wolfe Axelrod Weinberger Assoc. LLC

XELR8 Holdings, Inc.

 

(212) 370-4500

(303) 316-8577

 

steve@wolfeaxelrod.com

CEO@xelr8.com

 

alisa@wolfeaxelrod.com

 

XELR8 HOLDINGS ANNOUNCES THIRD QUARTER AND NINE MONTHS FINANCIAL RESULTS

 

- Net Sales Show Increase of 47% Compared to Year Ago Third Quarter -

 

- Number of Participants at Quarter End was in Excess of 11,600 -

 

- Management to Host Conference Call Today at 10:30 a.m. ET -

 

DENVER, Colo. – November 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 nine months ended September 30, 2008.

 

Financial and operational highlights for third quarter and nine months:

 

·                  Year over year revenues increased 47% in the quarter and 62% in the nine months period

·      Gross profit was $1.6 million in the quarter and $4.6 million during the nine months period, improvements of 49% and 72% respectively compared to same periods one year ago

·                  Growth in participants was 11,649 as of September 30, 2008, a 10% sequential increase from Q2

·                  Cash and cash equivalents were $1.8 million as of September 30, 2008

 

Total revenue for the third quarter ended September 30, 2008 was $2.1 million, a 47% increase compared to total revenue of $1.4 million for the third quarter ended September 30, 2007. Gross profit grew to $1.6 million for the three months ended September 30, 2008, up 49% from $1.1 million in the prior year period. Gross margin in the quarter was 77%, an improvement from 76% 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 September 30, 2008, increased slightly to $0.41 million, or $(0.03) per share, compared to a loss of $0.36 million, or $(0.02) per share, in the prior year.

 

Total revenue for the nine months ended September 30, 2008 was approximately $6.0 million, an increase of 62% compared to total revenue of $3.7 million for the nine months period ended September 30, 2007. Gross profit improved to $4.6 million for the nine months ended September 30, 2008, up 72% from $2.7 million in the prior year period. Gross margin in the nine months period was 77%, an improvement from 72% 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 nine months ended September 30, 2008, decreased 32% to $1.8 million, or $(0.11) per share, compared to a loss of $2.6 million, or $(0.19) per share, in the prior year period.

 

The Company continues to remain well capitalized. As of September 30, 2008, cash and cash equivalents were approximately $1.8 million and the Company continues to be debt free. Net cash used by operating activities was $0.44 million used during the third quarter and $0.86 million used during the nine months period.

 

- More -

 


 

“Bazi, XELR8’s powerful, concentrated, antioxidant nutritional drink continues to show major success in the marketplace, maintaining its sales momentum through the third quarter,” said Mr. John Pougnet, Chief Executive Officer of XELR8.  “Bazi accounts for over 92% of sales and its success vindicates management’s decision to focus on establishing Bazi as the core product for the Company.  During the third quarter the Company continued the sales promotional programs that have been instrumental in maintaining our distributors’ high degree of enthusiasm for the product and the programs supporting it.  Our ‘XELR8 to a Million’ promotion attained good acceptance and reached a level of success that warranted rewarding the leading distributors with recognition both internally and with cash rewards; a current expense that we expect will pay significant future benefits.”

 

“In the current economic climate,” Mr. Pougnet noted, “we anticipate a growing number of consumers will recognize the opportunity to supplement their income by becoming a member of the XELR8 team.  Bazi’s documented nutritional profile is designed to satisfy the needs of the consumer who is looking for a product that is easy to use and has recognized health benefits.   Our compensation program has attracted many participants and our growing network now exceeds 11,600.”

 

Mr. Pougnet concluded, “The strength of the Company is in its people and its key product - Bazi.  We will continue to focus on increasing the distributor network by offering the best combination of incentive programs and marketing assistance and will invest the necessary funds to do so.  With our dedicated distributors leading the way, we believe that our goal of positive cash flow and profitability are realizable in the near future.”

 

There will be a conference call today at 10:30 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) 869-3847; international callers dial (201) 689-8261.  In addition, the replay of the conference call will be available approximately three hours after the call has ended. The replay can be accessed at: http://www.xelr8tools.com/Media/ConfCall102908.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

 

 

 

September 30,

 

December 31,

 

 

 

2008

 

2007

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

1,827,842

 

$

2,245,858

 

Accounts receivable, net of allowance for doubtful accounts of $2,376 and $12,231, respectively

 

5,016

 

7,460

 

Inventory, net of allowance for obsolescence of $187,619 and $189,403, respectively

 

394,556

 

370,843

 

Prepaid expenses and other current assets

 

417,220

 

329,015

 

Total current assets

 

2,644,634

 

2,953,176

 

 

 

 

 

 

 

Intangible assets, net

 

17,038

 

17,959

 

Property and equipment, net

 

46,038

 

81,405

 

Deferred offering and loan costs

 

—

 

—

 

 

 

 

 

 

 

Total assets

 

$

2,707,710

 

$

3,052,540

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable and accrued expenses

 

$

1,111,826

 

$

832,697

 

 

 

 

 

 

 

Total Liabilities

 

1,111,826

 

832,697

 

 

 

 

 

 

 

Commitments and Contingencies

 

 

 

 

 

 

 

 

 

 

 

SHAREHOLDERS’ EQUITY (DEFICIT) (Note 2):

 

 

 

 

 

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

 

23,843,449

 

22,696,657

 

Accumulated (deficit)

 

(22,263,262

)

(20,492,011

)

 

 

 

 

 

 

Total shareholders’ equity (deficit)

 

1,595,884

 

2,219,843

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

2,707,710

 

$

3,052,540

 

 


 

XELR8 HOLDINGS, INC.

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

Three and Nine Months Ended September 30, 2008 and 2007

 

 

 

For the Three
Months Ended

 

For the Nine
Months Ended

 

 

 

September 30, 2008

 

September 30, 2007

 

September 30, 2008

 

September 30, 2007

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

2,109,995

 

$

1,432,220

 

$

5,964,194

 

$

3,687,690

 

Cost of goods sold

 

486,068

 

342,233

 

1,369,128

 

1,014,765

 

Gross profit

 

1,623,927

 

1,089,987

 

4,595,066

 

2,672,925

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Selling and marketing expenses

 

1,355,045

 

820,080

 

4,059,998

 

2,417,200

 

General and administrative expenses

 

674,712

 

642,930

 

2,295,770

 

2,429,738

 

Research and development expenses

 

3,230

 

3,214

 

5,742

 

8,342

 

Depreciation and amortization

 

11,470

 

11,716

 

35,158

 

45,992

 

Total operating expenses

 

2,044,457

 

1,477,940

 

6,396,668

 

4,901,272

 

 

 

 

 

 

 

 

 

 

 

Net (loss) from operations

 

(420,530

)

(387,953

)

(1,801,602

)

(2,228,347

)

Other income (expense)

 

 

 

 

 

 

 

 

 

Interest income

 

11,615

 

32,674

 

45,251

 

67,716

 

Other expenses

 

—

 

—

 

(13,770

)

 

 

(Loss) on disposal of asset

 

—

 

—

 

(1,130

)

—

 

Interest (expense)

 

—

 

—

 

—

 

(439,537

)

 

 

 

 

 

 

 

 

 

 

Total other income (expense)

 

11,615

 

32,674

 

30,351

 

(371,821

)

 

 

 

 

 

 

 

 

 

 

Net (loss)

 

$

(408,915

)

$

(355,279

)

$

(1,771,251

)

$

(2,600,168

)

 

 

 

 

 

 

 

 

 

 

Net (loss) per common share

 

 

 

 

 

 

 

 

 

Basic and diluted net (loss) per share

 

$

(0.03

)

$

(0.02

)

$

(0.11

)

$

(0.19

)

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding, basic and diluted

 

15,697,170

 

15,197,170

 

15,576,732

 

13,544,596

 

 


 

XELR8 HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

Nine Months Ended September 30, 2008 and 2007

 

 

 

September 30,

 

September 30,

 

 

 

2008

 

2007

 

Cash flows from operating activities:

 

 

 

 

 

Net income (loss)

 

$

(1,771,251

)

$

(2,600,168

)

Adjustments to reconcile

 

 

 

 

 

Depreciation and amortization

 

35,158

 

45,993

 

Loss on disposal of asset

 

1,130

 

—

 

Stock and stock options issued for services

 

694,319

 

1,188,848

 

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

 

(9,855

)

9,121

 

Change in allowance for inventory obsolescence

 

(1,784

)

53,760

 

Change in allowance for product returns

 

42,063

 

30,866

 

Changes in assets and liabilities:

 

 

 

 

 

Accounts receivable

 

12,299

 

(11,998

)

Inventory

 

(21,930

)

(255,530

)

Other current assets

 

(88,204

)

(62,137

)

Accounts payable and accrued expenses

 

237,066

 

214,235

 

Net cash (used) by operating activities

 

(857,219

)

(958,121

)

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

Proceeds from maturity of investments

 

—

 

—

 

Capital expenditures

 

—

 

(14,242

)

Net cash (used) by investing activities

 

—

 

(14,242

)

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

Proceeds from bridge loan financing

 

—

 

250,000

 

Repayments of bridge financing

 

—

 

(500,000

)

Offering costs

 

(60,797

)

(380,551

)

Issuance of common stock

 

500,000

 

4,000,000

 

Net cash provided from financing activities

 

439,203

 

3,369,449

 

 

 

 

 

 

 

NET INCREASE (DECREASE) IN CASH

 

(418,016

)

2,397,086

 

CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD

 

2,245,858

 

76,147

 

CASH AND CASH EQUIVALENTS, END OF THE PERIOD

 

$

1,827,842

 

$

2,473,233

 

 

 

 

 

 

 

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