EX-99.2 3 exhibit99_2.htm EXHIBIT 99.2 exhibit99_2.htm
Exhibit 99.2

XELR8 HOLDINGS, INC. Announces Fourth Quarter and 2008 Annual Financial Results

·  
53% Increase in Net Sales as compared to last year
·  
65% Increase in Gross Profit as compared to last year

March 31, 2009 – Denver CO.- XELR8 Holdings, Inc. (OTCBB: XELR), a provider of functional foods, beverages and nutritional supplements, announced today it’s 2008 Financial results for the year ended December 31, 2008.

Financial and operational highlights for fourth quarter and year ended December 31, 2008:

·  
Revenues increased 25% in the fourth quarter and 53% for the year ended December 31, 2008
·  
Gross profit was $1.1 million in the fourth quarter and $5.7 million for the year ended December 31, 2008, improvements of 30% and 65% respectively compared to same periods one year ago
·  
Cash and cash equivalents were $1.6 million as of December 31, 2008

Total revenue for the fourth quarter ended December 31, 2008 was $1.45 million, a 25% increase compared to total revenue of $1.17 million for the fourth quarter ended December 31, 2007. Gross profit grew to $1.1 million for the three months ended December 31, 2008, up 30% from $0.8 million in the prior year period. Gross margin in the quarter was 79%, an improvement from 69% 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 December 31, 2008, decreased 47% to $0.34 million, or $(0.03) per share, compared to a loss of $0.64 million, or $(0.04) per share, in the prior year.

Total revenue for the year ended December 31, 2008 was approximately $7.4 million, an increase of 53% compared to total revenue of $4.9 million for the year ended December 31, 2007. Gross profit improved to $5.7 million for the year ended December 31, 2008, up 65% from $3.5 million in the prior year period. Gross margin for the year 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 year ended December 31, 2008, decreased 35% to $2.1 million, or $(0.14) per share, compared to a loss of $3.2 million, or $(0.23) per share, in the prior year period.

John Pougnet, XELR8 Holdings CEO said “We are very pleased to report record sales numbers for the year, with both large increases in sales and gross profit margins from 2007. Our operating plan for 2009 is focused on the continued growth and market penetration of Bazi™, and increasing the number of independent distributors and customers, growing revenues, and generating gross profits.”

“Our increase in sales reflect the continued growth of our Bazi product. Bazi represented 92% of sales for the year ended December 31, 2008.  We feel that through our continued incentive and bonus programs offered to our distributors, Bazi sales will continue to grow strongly in 2009. The number of distributors continues to grow, and we continue to see no reason why that should not continue in the upcoming year.  As we move forward into 2009, we believe we will move closer to achieving our goal of achieving positive cash flow, as well as increasing shareholder value.” concluded Mr. Pougnet.

FINANCIAL TABLES TO FOLLOW

 
 
 


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. XELR8's primary product is Bazi™, a powerful, concentrated, antioxidant (Vitamins A, C & E) nutritional drink packed with eight different super fruits and berries, including the Chinese jujube, the South American Açai Berry, Blueberries and Raspberries plus 12 vitamins and 68 minerals, providing all the daily vitamins and minerals you need in a single, convenient, great tasting 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 former Head Coach Mike Shanahan; professional football superstars Brian Griese and Marco Rivera; Olympians Briana Scurry and Caroline Lalive; Stanley Cup Winner Blake Sloan; and PGA Tour Professional Tom Pernice, Jr. Additionally, XELR8 has collaboration agreements with both the renowned Steadman Hawkins Clinic and the Greenville Hospital System of South Carolina. 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.

Safe Harbor
Except for the historical information contained herein, the matters set forth in this press release, including the description of the company and its products offerings, are forward-looking statements within the meaning of the "safe harbor" provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the historical volatility and low trading volume of our stock, the risk and uncertainties inherent in the early stages of growth companies, the company's need to raise substantial additional capital to proceed with its business, risks associated with competitors, and other risks detailed from time to time in the company's most recent filings with the Securities and Exchange Commission. These forward-looking statements speak only as of the date hereof. The company disclaims any intent or obligation to update these forward-looking statements.

Investor Relations
David Elias
516-967-0205


 
 
 

XELR8 HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
As of December 31, 2008 and 2007 
 
   
2008
    
2007
  
ASSETS
            
             
Current assets:
            
Cash and cash equivalents
   $ 1,576,510     $ 2,245,858  
Accounts receivable, net of allowance for doubtful accounts of $3,071 and $12,231, respectively
     6,825       7,460  
Inventory, net of allowance for obsolescence of $116,095 and $189,403, respectively
     176,236       370,843  
Prepaid expenses and other current assets
     509,377       329,015  
Total current assets
     2,268,948       2,953,176  
                 
Intangible assets, net
     21,411       17,959  
Property and equipment, net
     35,832       81,405  
                 
Total assets
   $ 2,326,191     $ 3,052,540  
                 
LIABILITIES AND SHAREHOLDERS’ EQUITY
                
Current liabilities:
                
Accounts payable
   $ 643,426     $ 574,413  
Return reserve
     134,836       76,193  
Accrued payroll and benefits
     71,193       61,475  
Other accrued expenses
     104,662       120,616  
                 
Total Liabilities
     954,117       832,697  
                 
Commitments and Contingencies (Note 7)
                
                 
SHAREHOLDERS’ EQUITY (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
     23,958,422       22,696,657  
Accumulated (deficit)
     (22,602,045 )     (20,492,011 )
                 
Total shareholders’ equity
     1,372,074       2,219,843  
                 
Total liabilities and shareholders’ equity
   $ 2,326,191     $ 3,052,540  
 
 
The notes are an integral part of these consolidated financial statements.

 
 
 
 
XELR8 HOLDINGS, INC.
For the Years Ended December 31, 2008 and 2007
 
   
2008
    
2007
  
Net revenue
   $ 7,416,372     $ 4,853,046  
Cost of goods sold
     1,677,035       1,380,663  
Gross profit
     5,739,337       3,472,383  
                 
Operating expenses:
                
Selling and marketing expenses
     4,950,718       3,180,392  
General and administrative expenses
     2,878,156       3,107,469  
Research and development expenses
     12,962       17,828  
Depreciation and amortization
     45,696       58,033  
Total operating expenses
     7,887,532       6,363,722  
                 
Net (loss) from operations
     (2,148,195 )     (2,891,339 )
Other income (expense)
                
Interest income
     53,061       87,646  
Other expenses
     (13,770 )     —  
Gain (Loss) on disposal of asset
     (1,130 )     1,500  
Interest (expense)
     —       (439,537 )
                 
Total other income (expense)
     38,161       (350,391 )
                 
Net (loss)
   $ (2,110,034 )   $ (3,241,730 )
                 
Net (loss) per common share
                
Basic and diluted net (loss) per share
   $ (0.14 )   $ (0.23 )
                 
Weighted average common shares outstanding, basic and diluted
     15,607,006       13,951,691  
 
The notes are an integral part of these consolidated financial statements.
 
 
 
 
XELR8 HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF
For the Years Ended December 31, 2008 and 2007
 
                           
Total
  
               
Additional
          
shareholders’
  
   
Common Stock
    
paid in
    
Accumulated
    
equity
  
   
Shares
    
Amount
    
Capital
    
(deficit)
    
(deficit)
  
Balances, January 1, 2007
     10,097,170     $ 10,097     $ 16,849,900     $ (17,250,281 )   $ (390,284 )
                                         
Issuance of Common Stock for Services
     2,100,000       2,100       1,017,900       —       1,020,000  
                                         
Issuance of Common Stock in Private Offerings, net of offering costs of $380,552
     3,000,000       3,000       3,616,448       —       3,619,448  
                                         
Stock Transferred by Shareholder for services
     —       —       350,000       —       350,000  
                                         
Stock-based compensation
     —       —       862,409       —       862,409  
                                         
Net (loss)
     —       —       —       (3,241,730 )     (3,241,730 )
                                         
Balances, December 31, 2007
     15,197,170     $ 15,197     $ 22,696,657     $ (20,492,011 )   $ 2,219,843  
                                         
Issuance of Common Stock in Private Offering, net of offering costs of $60,797
     500,000       500       438,703       —       439,203  
                                         
Anti-dilution of Series E & F Common Stock Warrants
     —       —       13,770       —       13,770  
                                         
Stock-based compensation
     —       —       809,292       —       809,292  
                                         
Net (loss)
     —       —       —       (2,110,034 )     (2,110,034 )
                                         
Balances, December 31, 2008
     15,697,170     $ 15,697     $ 23,958,422     $ (22,602,045 )   $ 1,372,074  
 
The notes are an integral part of these consolidated financial statements.
 
 
 
 
XELR8 HOLDINGS, INC.
For the Years Ended December 31, 2008 and 2007
 
   
2008
  
2007
  
Cash flows from operating activities:
    
  
    
    
Net income (loss)
  
$
(2,110,034
)
$
(3,241,730
)
Adjustments to reconcile
          
Depreciation and amortization
  
45,696
  
58,033
  
Loss (Gain) on sale of equipment
  
1,130
  
(1,500
)
Stock and stock options issued for services
  
789,292
  
1,372,408
  
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
  
(9,160
)
1,525
  
Change in allowance for inventory obsolescence
  
(73,308
)
147,748
  
Change in allowance for product returns
  
58,643
  
30,866
  
Changes in assets and liabilities:
          
Accounts receivable
  
9,795
  
(4,200
)
Inventory
  
267,915
  
(107,227
)
Other current assets
  
(180,362
)
(69,723
)
Accounts payable and accrued expenses
  
82,777
  
205,915
  
Net cash (used) by operating activities
  
(1,103,846
)
(1,178,996
)
           
Cash flows from investing activities:
          
Proceeds from sale of equipment
  
—
  
1,500
  
Capital expenditures and patent expenses
  
(4,705
)
(22,242
)
Net cash (used) provided by investing activities
  
(4,705
)
(20,742
)
           
Cash flow from financing activities:
          
Proceeds from bridge loan financing
  
—
  
250,000
  
Repayments of bridge financing
  
—
  
(500,000
)
Issuance of common stock, net of offering costs
  
439,203
  
3,619,449
  
Net cash provided by financing activities
  
439,203
  
3,369,449
  
           
NET INCREASE (DECREASE) IN CASH
  
(669,348
)
2,169,711
  
CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD
  
2,245,858
  
76,147
  
CASH AND CASH EQUIVALENTS, END OF THE PERIOD
  
$
1,576,510
  
$
2,245,858
  
           
SUPPLEMENTAL CASH FLOW DISCLOSURE
          
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
  
Expiration of call feature liability on options reclassified to equity
  
$
20,000
  
$
—
  
 
The notes are an integral part of these consolidated financial statements.