Zurvita Holdings, Inc. (OTCBB: ZRVT) ("Zurvita" or the "Company"),
a dynamic direct-to-consumer network marketing company offering
turn-key solutions for high-quality consumer and business products
and services, today announced its financial results for the second
quarter of the 2011 fiscal year ended January 31, 2011.
Second Quarter 2011 Highlights
- Revenues totaled $1.1 million versus $1.7 million one year
ago.
- Gross profit totaled $405 thousand versus $581 thousand one
year ago.
- Gross margin increased slightly to 35.7%, versus 35.1% one year
ago.
- Loss from operations before other income and expenses decreased
to $910 thousand from $1.3 million one year ago.
- Net income was $2.1 million, versus a net loss of $1.7 million
one year ago.
- Completed technology transfer agreement with Infusion Brands
International, Inc. f/k/a OmniReliant Holdings, Inc. for "ZLinked"
search engine software.
"During the second quarter, we continued to position Zurvita for
strong future growth as we steered the Company in a vibrant new
direction and streamlined our product offerings and sales system,"
stated Jay Shafer, Zurvita Co-Chief Executive Officer. "With the
launch of our new Health & Wellness division, Zurvita has now
introduced new products and strategies designed to create financial
independence for our representatives based on projected increases
in spending for healthcare, nutritional supplements and managing
disease. The Company experienced declines in revenues for the three
and six month periods due to a highly varied product portfolio
resulting in an overly burdened network marketing sales channel. We
have taken the steps necessary to improve our business by adding
our new Health & Wellness division, which gives us access to a
trillion dollar healthcare and nutrition industry with consumer
friendly products, streamlining our sales, compensation, and
administrative processes, and by strategically placing our
business-to-business services in a separate division."
Second Quarter 2011 Results
Revenue for the fiscal 2011 second quarter ended January 31,
2011, declined 31% or approximately $517 thousand to $1.1 million
from $1.7 million in the same quarter of fiscal 2010. The decrease
in total revenue was primarily a result of a decline in
administrative website sales and marketing fees paid to the Company
due to a decline in recruitment, the number of active consultants,
and consultant enrollment fees. The decline in recruiting and
active consultant base was a result of overly burdensome processes
and procedures and a highly varied product portfolio.
Administrative websites sales and marketing fees were
approximately $390 thousand and $236 thousand respectively for the
three months ended January 31, 2011, as compared to approximately
$514 thousand and $555 thousand, respectively, for the three months
ended January 31, 2010. The aggregate decrease in administrative
website sales and marketing fees was approximately $444 thousand
for the three months ended January 31, 2011, and is a result of
less recruiting for the period as compared to the three months
ended January 31, 2010.
The Company's advertising sales and commissions relating to
energy sales were approximately $213 thousand and $165 thousand
respectively for the three months ended January 31, 2011, as
compared to approximately $251 thousand and $96 thousand,
respectively. The Company had been focusing its efforts and
resources on these new products and had been recruiting consultants
based upon the availability of these products. The Company's
membership fees were approximately $132 thousand for the three
months ended January 31, 2011 as compared to approximately $237
thousand for the three months ended January 31, 2010. The decrease
in membership revenue is a result of the Company's efforts to
re-focus recruiting, advertising and energy sales.
Gross profit for the three months ended January 31, 2011, was
approximately $405 thousand as compared to a gross profit of
approximately $581 thousand for the three months ended January 31,
2010. The decrease in gross profit was due to the decrease in
revenue for the quarter. Gross profit margin increased slightly to
35.7% versus 35.1% one year ago.
Zurvita's operating expenses for the fiscal second quarter were
approximately $1.3 million, compared to $1.9 million one year
earlier. The decrease in operating expenses was primarily
attributable to lower professional fees through extensive cost
containment efforts, lower selling and marketing expenses related
to amortization of the marketing agreement between the Company and
Infusion Brands International, Inc., and lower business and travel
expenses. Loss from operations before other income and expenses for
the second quarter of 2011 decreased to $910 thousand from $1.3
million for the three months ended January 31, 2010.
For the second quarter of fiscal 2011, the company recorded net
income of approximately $2.1 million, or $0.03 per diluted share,
versus a net loss of approximately $1.7 million, or $0.03 per
diluted share for the same period last year. Diluted earnings per
share were calculated using a weighted average share count of 61.5
million in the second fiscal quarter of 2011, compared to 56.7
million one year ago. Although the Company experienced improvement
in gross margin, the increase in net income is attributable to
non-cash unrealized gains, including a $2.8 million gain resulting
from fair valuing the Company's outstanding liability warrants.
Six Month Results
Revenues for the first six months of the 2011 fiscal year were
$2.4 million, down 15.6% from $2.9 million in the same period one
year ago. Gross profit increased 31% to $836 thousand, or 34% of
sales, versus gross profit of $640 thousand, or 22% of sales, in
the first six months of fiscal 2010. The increase in gross profit
is due to the focus on selling higher margin products and reducing
non-traditional sales compensation practices. Operating expenses
for the six months ended January 31, 2011, declined 11% to $2.9
million, versus operating expenses of $3.3 million for the same
prior year period. Operating loss improved to $2.1 million versus
$2.7 million for the six months ended January 31, 2010. The Company
reported net income of $3.9 million, or $0.6 per diluted share,
versus a net loss of $7.3 million, or $0.13 per diluted share, for
the same prior year period. The increase in net income is
attributable to non-cash unrealized gains, including a $5.9 million
gain resulting from the fair valuing of the Company's outstanding
liability warrants.
Financial Condition
As of January 31, 2011, the Company had cash and cash
equivalents of $16 thousand. Net cash used in operating activities
for the six three months of fiscal 2011 was approximately $1.8
million, down from $1.9 million for the same period last year.
Total liabilities, redeemable preferred stock and stockholders'
deficit was $911 thousand as of January 31, 2011 versus total
liabilities, redeemable preferred stock and stockholders' deficit
of $3.4 million for the year ended July 31, 2010.
On March 15, 2011, the Company entered into an oral agreement
with Vicis Capital Master Fund ("Vicis") to sell Vicis 1 million
shares of its Series C Convertible Preferred Stock (the "Series C
Preferred Stock") and Series C Warrants to purchase an aggregate of
4 million shares of the Company's common stock (the "Series C
Warrants" and, together with the Series C Preferred Stock, the
"Private Placement Securities"). The purchase price of the Private
Placement Securities is $1 million, and the funds were received
from Vicis on March 16, 2011. However, a Preferred Stock purchase
agreement and other related transaction documents (the "Transaction
Documents") are in the process of being negotiated with Vicis and,
accordingly, have not been executed at this time. The Private
Placement Securities will be issued to Vicis upon the execution of
the Transaction Documents.
Business Outlook
"We're very excited about the launch of our new Health &
Wellness division and the tremendous opportunity we see for health
care products, nutritional supplements and disease prevention
solutions," commented Mark Jarvis, Zurvita Co-Chief Executive
Officer. "Economics and history are the dictating forces behind our
new streamlined focus, with rising health care costs and government
programs focusing us all on these core needs, and generating
natural opportunities for the type of targeted and value-driven
solutions represented best by the network marketing sales model."
Mr. Jarvis added, "The growing demand for health and wellness
products being driven by baby boomers, who control half of the
country's spending power, creates a powerful opportunity for our
industry. With the launch of 'Zeal,' our proprietary new wellness
formula, and 'Zurvita Health Plus,' which helps to manage health
care costs through affordable health services, we believe we have
created a unique value proposition in our industry and for Zurvita
independent representatives. By providing our consultants with
innovative and essential products such as these, we believe that
Zurvita has a solid base for future growth."
About Zurvita Holdings, Inc.
Zurvita is a dynamic direct-to-consumer network marketing
company offering high-quality health and wellness products and
services targeting individuals and families. The company's highly
differentiated services feature best in class health & wellness
consumer products as well as small business solutions offered
through a growing network of independent and professional sales
consultants. Zurvita has rapid growth potential due to its
experienced sales management team with a proven track record in the
health & wellness network and direct marketing and a unique
business-to-business commercial division offering turnkey solutions
for commercial energy and Internet advertising. For more
information, please visit http://www.zurvita.com.
Follow Zurvita on Twitter at: http://twitter.com/Zurvita and on
Zurvita's Facebook Fan Page at: www.facebook.com/Zurvita.
Safe Harbor Statement
Matters discussed in this press release contain forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. When used in this press release, the words
"anticipate," "believe," "estimate," "may," "intend," "expect" and
similar expressions identify such forward-looking statements.
Actual results, performance or achievements could differ materially
from those contemplated, expressed or implied by the
forward-looking statements contained herein. These forward-looking
statements are based largely on the expectations of the Company and
are subject to a number of risks and uncertainties. These include,
but are not limited to, risks and uncertainties associated with:
the impact of economic, competitive and other factors affecting the
Company and its operations, markets, product, and distributor
performance, the impact on the national and local economies
resulting from terrorist actions, and U.S. actions subsequently;
and other factors detailed in reports filed by the Company.
- FINANCIAL TABLES FOLLOW -
ZURVITA HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months Ended For the Six Months Ended
January 31, January 31,
2011 2010 2011 2010
------------ ------------ ------------ ------------
REVENUES
Administrative
websites $ 389,633 $ 513,770 $ 851,362 $ 998,135
Advertising sales 212,882 251,819 454,156 255,591
Commissions 165,535 95,521 276,626 156,841
Marketing fees and
materials 235,704 555,105 584,931 951,227
Membership fees 131,912 236,696 281,378 539,751
------------ ------------ ------------ ------------
Total revenues 1,135,666 1,652,910 2,448,453 2,901,545
COST OF SALES
Benefit and
service cost 309,477 352,952 622,401 630,246
Sales commissions 420,869 719,028 990,226 1,630,876
------------ ------------ ------------ ------------
Total cost of
sales 730,346 1,071,980 1,612,627 2,261,122
GROSS PROFIT 405,320 580,930 835,826 640,423
OPERATING EXPENSES
Depreciation 9,531 8,824 19,317 17,276
Office related
expenses 134,825 85,575 261,524 168,888
Payroll and
employee benefits 507,091 442,390 1,113,943 762,970
Professional fees 202,082 442,723 494,968 748,897
Selling and
marketing 424,444 838,693 932,830 1,490,807
Travel 37,476 52,285 117,227 106,033
------------ ------------ ------------ ------------
Total operating
expenses 1,315,449 1,870,490 2,939,809 3,294,871
------------ ------------ ------------ ------------
Loss from operations
before other income
(expense) (910,129) (1,289,560) (2,103,983) (2,654,448)
OTHER INCOME
(EXPENSE)
Gain on change in
fair value of
share conversion
feature 138,764 28,103 462,013 32,295
Gain (loss) on
change in fair
value of
marketable
securities 160,000 (400,000) (160,000) (530,000)
Gain (loss) on
change in fair
value of warrants 2,784,000 2,162 5,908,000 (4,039,665)
Interest expense (84,222) (79,667) (167,849) (108,096)
Interest income - - 4,756 -
------------ ------------ ------------ ------------
Total other
income
(expense) 2,998,542 (449,402) 6,046,920 (4,645,466)
------------ ------------ ------------ ------------
Income (loss) before
income taxes 2,088,413 (1,738,962) 3,942,937 (7,299,914)
Income taxes 1,371 10,357 2,673 20,142
------------ ------------ ------------ ------------
Net income (loss) $ 2,087,042 $ (1,749,319) $ 3,940,264 $ (7,320,056)
============ ============ ============ ============
Basic and diluted
earnings (loss) per
share $ 0.03 $ ( 0.03) $ 0.06 $ ( 0.13)
============ ============ ============ ============
Basic and diluted
weighted average
number of common
shares outstanding 61,498,713 56,653,792 61,498,713 56,546,896
============ ============ ============ ============
The accompanying notes are an integral part of these condensed consolidated
financial statements.
ZURVITA HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
January 31, 2011 July 31, 2010
---------------- ----------------
ASSETS
Current assets
Cash $ 16,305 $ 289,442
Marketable securities (at fair value) 320,000 480,000
Note receivable - related party - 1,702,000
Accounts receivable 154,245 137,123
Agent advanced compensation - 448,553
Deferred expenses 33,073 127,351
Other assets 191,983 41,173
---------------- ----------------
Total current assets 715,606 3,225,642
Property, plant and equipment (net) 80,455 94,965
Merchant account deposit 115,333 115,333
---------------- ----------------
Total assets $ 911,394 $ 3,435,940
================ ================
LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable $ 346,973 $ 249,762
Accounts payable - related party 140,139 127,733
Notes payable - current 181,305 284,967
Accrued expenses 254,572 332,217
Deferred revenue 375,123 808,957
Deferred compensation - related party 97,546 110,238
Income tax payable 5,300 2,628
---------------- ----------------
Total current liabilities 1,400,958 1,916,502
Notes payable - long term 1,797,295 1,639,268
Fair value of share conversion
feature - 462,013
Fair value of warrants 462,000 6,370,000
---------------- ----------------
Total liabilities 3,660,253 10,387,783
---------------- ----------------
Redeemable preferred stock 4,550,747 4,550,747
Stockholders' deficit
Common stock ($.0001 par value,
300,000,000 shares authorized;
69,498,713 and 69,497,713 shares
issued and 61,498,713 and 61,497,713
shares outstanding as of January 31,
2011 and July 31, 2010,
respectively) 6,950 6,950
Treasury stock (210,000) (210,000)
Additional paid-in capital 10,241,459 9,978,738
Accumulated deficit (17,338,015) (21,278,278)
---------------- ----------------
Total stockholders' deficit (7,299,606) (11,502,590)
---------------- ----------------
Total liabilities, redeemable
preferred stock and stockholders'
deficit $ 911,394 $ 3,435,940
================ ================
The accompanying notes are an integral part of these condensed consolidated
financial statements.
ZURVITA HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Six Months Ended
January 31, 2011 January 31, 2010
---------------- ----------------
Cash flows from operating activities
Net income (loss) $ 3,940,264 $ (7,320,056)
Adjustments to reconcile net income
(loss) to net cash used in operating
activities:
Amortization of note payable
discount 93,368 52,254
Amortization of deferred marketing
costs - 328,700
Depreciation 19,317 17,276
Share-based compensation 262,220 243,583
Gain on change in fair value of
share conversion feature (462,013) (32,295)
(Gain) loss on change in fair value
of warrants (5,908,000) 4,039,665
Loss on change in fair value of
marketable securities 160,000 530,000
Changes in operating assets and
liabilities
Increase in accounts receivable (17,122) (56,280)
Decrease in agent advanced
compensation 448,553 252,729
Decrease (increase) in deferred
expenses 94,279 (294,620)
Increase in other assets (131,180) (15,541)
Increase in accounts payable and
accrued expenses 99,307 84,234
(Decrease) increase in deferred
revenue (433,834) 270,678
Decrease in deferred compensation
related party (12,692) -
---------------- ----------------
Net cash used in operating activities (1,847,533) (1,899,673)
---------------- ----------------
Cash flows from investing activities
Net proceeds from promissory note
recievable 1,702,000 -
Purchase of property and equipment ( 4,815) (6,698)
Purchase of marketable securities - (770,000)
---------------- ----------------
Net cash provided by (used in) investing
activities 1,697,185 (776,698)
---------------- ----------------
Cash flows from financing activities
Proceeds from borrowings 10,000 -
Proceeds from exercise of warrants 500 -
Proceeds from sale of preferred
stock - 2,000,000
Principal payments made on notes
payable (133,289) (647,967)
---------------- ----------------
Net cash (used in) provided by financing
activities (122,789) 1,352,033
---------------- ----------------
Net change in cash balance (273,137) (1,324,338)
Beginning cash 289,442 1,390,953
---------------- ----------------
Ending cash $ 16,305 $ 66,615
================ ================
Supplemental disclosure of cash flow
information
Cash paid for interest $ 8,410 $ 17,727
================ ================
Cash paid for taxes $ - $ -
================ ================
The accompanying notes are an integral part of these condensed consolidated
financial statements.
Add to Digg Bookmark with del.icio.us Add to Newsvine
Company Contact: Zurvita Holdings, Inc. Jason Post Chief
Financial Officer Phone: 407.805.8900 jason.post@amacoregroup.com
Investor Relations Contact: Hampton Growth Resources, LLC
Andrew W. Haag Managing Partner Phone: 877.368.3566
zrvt@hamptongrowth.com
Zurvita (CE) (USOTC:ZRVT)
Gráfica de Acción Histórica
De May 2024 a Jun 2024
Zurvita (CE) (USOTC:ZRVT)
Gráfica de Acción Histórica
De Jun 2023 a Jun 2024
