Digital Shelf Space Corp. Announces Unaudited Financial Results for the Six Months Ending June 30, 2011
August 19 2011 - 8:00AM
Marketwired Canada
Digital Shelf Space Corp. (TSX VENTURE:DSS) (the "Company" or "DSS") announces
unaudited financial results for the six months ended June 30, 2011.
Highlights
-- Since launching the Company's first product, the GSP RUSHFIT DVD workout
program, the Company achieved revenues for the six months ending June
30, 2011 in excess of $1.1 million dollars.
-- Revenues for the second quarter ending June 30 were $582,251, a 3.6%
increase over the previous quarter. The growth this quarter is despite
seasonal trends for health and fitness products when revenues in the
first quarter of the calendar year typically generate the largest
proportion of annual sales.
-- In connection with the initial launch of the GSP RUSHFIT Direct Response
TV Campaign in June, wholesale revenues increased 195% overall in the
2nd quarter, as retail distribution continued to grow in Canada.
-- On May 16, 2011, the Company closed a private placement in the amount of
$1,226,527.
-- On June 27, 2011 Mr. Jeffrey Sackman, former President of Lionsgate
Films and CEO and Founder of THINKfilm, was appointed to the board of
directors of the Company.
-- On June 28, 2011 the Company converted $262,500 in loans owing into
equity of the Company at a price per common share of $0.22. The Company
is now debt free.
Revenue
The total revenue for the six months of $1,144,078 (July 31, 2010 - $5,053)
continued to be driven primarily by the Company's new product GSP RUSHFIT, an
8-week home-based DVD workout program starring Mixed Martial Arts ("MMA")
welterweight world champion Georges St-Pierre. In addition to the product sales
directly through the GSP RUSHFIT website (www.gsprushfit.com), wholesale
revenues grew by 195% through the Company's partnership with Northern Response
(International) Ltd. ("Northern"). Product sold to Northern was distributed in
Canada through some of the largest retailers such as Future Shop, Best Buy and
Walmart Canada. Plans for international expansion continue to move forward with
expansion planned in the next quarter.
Mr. Jeffrey Sharpe, CEO and President of DSS stated, "We are very pleased with
the financial results for our second quarter and for the 6 month period ending
June 30, 2011. For us to increase our revenue in the second quarter over the
first quarter is a very positive sign that GSP RUSHFIT is gaining significant
traction in the retail market place. Typically revenues for health and fitness
products experience seasonal trends with the first quarter of the calendar year
most often generating the largest proportion of annual sales. We have now sold
over 25,000 copies of GSP RUSHFIT and have over 20,000 followers on our GSP
RUSHFIT Facebook page. Our retail sell through has happened very quickly and
Northern Response (International) Ltd. anticipates the program being for sale in
over 3000 stores across Canada by the end of the third quarter. We look forward
to expanding our distribution channels internationally and extending our
marketing and advertising reach throughout the balance of 2011." GSP RUSHFIT was
launched on December 10, 2010 and has quickly established itself as a premium
brand in the lucrative home fitness market.
Expenses
During the six month period ending June 30, 2011, operating expenses increased
to $1,477,584 (July 31, 2010 - $557,587). Contributing factors to this increase
of $919,997 were those directly related to the increased revenue generated in
this quarter by the sales of the GSP RUSHFIT program and expenses related to the
publicly traded status of the Company for which there were no comparative
expenses in 2010.
Net Loss
Although expenses almost tripled on a period to period comparison, the loss for
the six months ended June 30, 2011 was $345,584, a decrease of $206,969 from the
net loss of $552,553 for six months ended July 31, 2010.
Selected Financial Highlights
Selected Period Information
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Six months Six months
ended ended
June 30, 2011 July 31, 2010
(Unaudited) (Unaudited)
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Net loss $ (345,584) $ (552,553)
Weighted average number of shares
outstanding 44,833,823 18,946,694
Net loss per share (1) $ (0.008) $ (0.029)
Total assets $ 2,239,676 $ 383,767
Total liabilities $ 208,797 $ 1,458,922
Shareholders equity $ 2,030,879 $ (1,075,155)
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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 expected revenue as new outlets are added, the Company enters into other
markets, expands existing advertising strategies and new marketing methods are
implemented; the expansion of the GSP RUSHFIT brand and distribution channels;
the impact and profitability of digital delivery of the Company's products;
penetration of new markets, both domestic and international, as well as expanded
advertising strategies and new marketing methods; the development and sale of
complementary GSP RISHFIT product lines; the launch of a new fitness-based DVD
series or product line starring a celebrity or athlete; 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, plans for
international expansion in the next quarter and the quantum of growth of
Canadian 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; revenues will continue at current levels and increase; 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 Company may not be able to sustain or increase revenues achieved
during the current reporting period; the Company's products may not achieve the
brand recognition and increased distribution as currently anticipated; the
digital delivery of the Company's products may not produce additional revenue in
the anticipated amounts, or at all; the Company may never expand its
distribution channels domestically or internationally; anticipated international
expansion may not occur in the next quarter; the Company may not adopt
successful advertising strategies or marketing methods; the Company may not
develop or sell complementary GSP RUSHFIT product lines and/or may not achieve
sales of such products to existing customers in the quantum anticipated, or at
all; the Company may not be able to launch a new fitness-based DVD series or
product line starring a celebrity or athlete; 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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