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XELR8 Holdings, Inc. Announces Fourth Quarter and 2008 Annual Financial Results
Date:3/31/2009

- 53% Increase in Net Sales as compared to last year

- 65% Increase in Gross Profit as compared to last year

DENVER, March 31 /PRNewswire-FirstCall/ -- XELR8 Holdings, Inc. (OTC Bulletin Board: XELR), a provider of functional foods, beverages and nutritional supplements, announced today its 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(TM), 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(TM), 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 Acai 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.
                          CONSOLIDATED STATEMENTS OF OPERATIONS
                    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 disposial 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
                    CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)
                   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.
                            CONSOLIDATED STATEMENTS OF CASH FLOWS
                       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.


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SOURCE XELR8 Holdings, Inc.
Copyright©2009 PR Newswire.
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