Digital Shelf Space Corp. Announces Annual Financial Results for the Year Ended December 31, 2010
March 28 2011 - 7:00AM
Marketwired Canada
Digital Shelf Space Corp. ("DSS" or the "Company") (TSX VENTURE:DSS) announces
annual financial results for the eleven months ended December 31, 2010.
Financial and Operational Highlights
-- Completed a reverse take-over (Qualifying Transaction) with Pypeline
Health Inc. on December 21, 2010.
-- Successfully closed a private placement concurrent with the closing of
the Qualifying Transaction of gross proceeds of $1,017,949.
-- Signed an agreement with one of the world's largest talent management
companies for business development.
-- The GSP RUSHFIT 8-week ultimate home based video workout program,
starring Mixed Martial Arts ("MMA") welterweight world champion Georges
St-Pierre, was released December 11, 2010 and was the largest component
of revenue.
-- Revenues of $47,204 in the eleven-month period ended December 31, 2010,
represents a significant increase from sales in the year-ended January
31, 2010.
-- Debt of $1,171,561 was converted to equity in connection with the
Qualifying Transaction.
Revenue
Revenues for the eleven-month period ended December 31, 2010, was $47,204 as
compared to $16,018 during the year ended January 31, 2010. The increase in
revenue is directly attributed to the release for sale on the internet
(www.gsprushfit.com) of the Company's new product, the GSP RUSHFIT 8-week
ultimate home based video workout program, starring MMA welterweight world
champion Georges St-Pierre, on December 11, 2010.
Expenses
During the eleven-month period, operating expenses increased to $1,461,342
compared to $1,234,024 for the year-ended January 31, 2010. The Cost of Sales
increased to $17,766 due to the increase in sales related to the release of the
Company's GSP RUSHFIT program. Other expenses directly related to the release
and that were comparatively higher when compared to the year-ended January 31,
2010 were media purchases of $11,588; material design and creative totaled
$88,820, and bank charges were $13,948 an increase of $11,091 primarily due to
the transitional costs related to the online sales.
As a result of the Qualifying Transaction the Company granted 4,005,000 stock
options, resulting in the recognition of stock-based compensation expense in the
amount of $352,040 (Jan 31, 2010 - $56,762). Interest expense, representing
interest accrued on loans from shareholders and convertible debt, increased to
$153,796, an increase of $101,437 over the prior year. The accrued interest and
principle were included in the debt to equity conversion at the completion date
of the Qualifying Transaction. Professional fees increased $14,971 to $60,259
due to increased accounting and legal costs during the period.
Decreases were realized in wages of $101,841(Dec 31, 2010 - $141,013; Jan 31,
2010 - $242,854) through staff reductions; management fees fell by $66,081 to
$105,000 due to management contracts that were terminated as at November 30,
2010. Also, a re-negotiated contract with the computer server management company
resulted in savings of $21,984, reducing content delivery costs to $29,152.
Amortization expense fell by $36,812 to $294,717.
Net Loss
Net loss for the eleven months ended December 31, 2010 was $1,430,016, an
increase of $210,929 over the net loss of $1,219,087 for the year-ended January
31, 2010.
Selected Financial Highlights
Selected Annual Information
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Eleven months
ended Year ended
December 31, January 31,
2010 2010
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Net loss $ (1,430,016) $ (1,219,087)
Weighted average number of shares
outstanding 10,447,782 8,761,261
Net loss per share (1) $ (0.14) $ (0.14)
Total assets $ 1,661,338 $ 580,660
Total liabilities $ 649,306 $ 1,106,622
Shareholders equity $ 1,012,032 $ (525,962)
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1. Basic and fully diluted net loss per share are the same
About Digital Shelf Space Corp.
Digital Shelf Space is an independent producer of home entertainment content and
online delivery technology provider to digital retailers, content owners and
aggregators. Digital Shelf Space's proprietary technology platform has been
custom built to deliver home entertainment content directly to consumers. The
platform blends e-commerce functionality and paid DVD, digital download and
streaming video delivery. For more information please visit
www.digitalshelfspace.com and to view our recently launched project with Georges
St-Pierre, please visit www.gsprushfit.com.
ON BEHALF OF THE BOARD
Jeffrey Sharpe, President & CEO
Forward Looking Statements
This news release contains "forward-looking information" within the meaning of
the Canadian securities laws. Forward-looking information is generally
identifiable by use of the words "believes", "may", "plans", "will",
"anticipates", "intends," "budgets", "could", "estimates", "expects",
"forecasts", "projects" and similar expressions, and the negative of such
expressions. Forward-looking information in this news release include statements
about the Company's strategy, future operations, prospects and plans of
management; the Company's expectations with respect to existing and future
agreements with third parties; estimates of the length of time the Company's
business will be funded by anticipated financial resources; the scope of
distribution of GSP RUSHFIT, the timing of and potential growth of Canadian and
International sales as a result of the Northern Response partnership, and
anticipated results and benefits of consumer use of celebrity fitness products.
In connection with the forward-looking information contained in this news
release, the Company has made numerous assumptions, regarding, among other
things, the timing and quantum of revenue generated through sales of the
Company's products; the sufficiency of budgeted expenditures in carrying out
planned activities; the Company's ability to protect its intellectual property
rights and not to infringe on the intellectual property rights of others; the
availability and cost of labour and services; expected growth of sales as a
result of the Northern Response Partnership and consumer demand ;and expected
results from the use of celebrity fitness products. While the Company considers
these assumptions to be reasonable, these assumptions are inherently subject to
significant uncertainties and contingencies.
Additionally, there are known and unknown risk factors which could cause the
Company's actual results, performance or achievements to be materially different
from any future results, performance or achievements expressed or implied by the
forward-looking information contained herein. Known risk factors include, among
others: the substantial investment of capital required to produce and market
video and entertainment productions, the need to obtain additional financing and
uncertainty as to the availability and terms of future financing,
unpredictability of the commercial success of our programming, difficulties in
integrating technological changes and other trends affecting the entertainment
industry, significant competition in the global economic market, the possibility
the rate of growth of the market for fitness media will slow, reliance on the
health and marketability of celebrity fitness talent in productions owned by the
Company, the possibility of competition from other ecommerce and online
marketing vendors, the continued strong growth in adoption of digital media, the
possibility of new fitness titles from traditional large studios that target the
male demographic, large media production companies may move ecommerce operations
in-house rather than outsourcing, reliance on production studios continuing to
outsource ecommerce operations, reliance on a number of key employees, limited
operating history, the possibility of claims against the intellectual property
rights of the Company, the possibility of infringements upon the intellectual
property rights of the Company; the Company may not have sufficiently budgeted
for expenditures necessary to carry out planned activities; future operating
results are uncertain and likely to fluctuate; the Company may not have the
ability to raise additional financing required to carry out its business
objectives on commercially acceptable terms, or at all; and volatility of the
market price of the Company's shares.
A more complete discussion of the risks and uncertainties facing the Company is
disclosed in the Company's Filing Statement dated November 16, 2010 and
continuous disclosure filings with Canadian securities regulatory authorities at
www.sedar.com. All forward-looking information herein is qualified in its
entirety by this cautionary statement, and the Company disclaims any obligation
to revise or update any such forward-looking information or to publicly announce
the result of any revisions to any of the forward-looking information contained
herein to reflect future results, events or developments, except as required by
law.
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