Attached files
| file | filename |
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| 8-K - CURRENT REPORT - DS HEALTHCARE GROUP, INC. | dskx_8k.htm |
EXHIBIT 99.1
DS Healthcare Group Files Annual Report and
Regains Compliance with Nasdaq Continued Listing Standards Following Notice from Nasdaq
POMPANO BEACH, FL – April 24, 2013 – DS Healthcare Group, Inc. (NASDAQ: DSKX), a leading developer of hair care, facial care and other personal care products, announced today that on April 18, 2013, it received a notice from NASDAQ indicating that the company was not in compliance with one of NASDAQ's continued listing standards due to the delinquent filing of its annual report on Form 10-K for the year ended December 31, 2012 as set forth in NASDAQ Listing Rule 5250(c)(i). Upon filing of its annual report on April 24, 2013, the company regained compliance with NASDAQ continued listing standards.
Total net revenues increased $1,551,562, or 16%, from $9,672,861 for the year ended December 31, 2011 to $11,224,424 for the year ended December 31, 2012. Such expansion also resulted in an increase in operating expenses. While the company’s net loss increased to a $3,623,110 net loss for the year ended December 31, 2012, the company anticipates recognizing revenues of approximately $2,000,000 of product orders during December 2012 that it was unable to fulfill prior to December 31, 2012. These product orders were subsequently shipped during the three months ended March 31, 2013.
The company’s chief executive officer, Daniel Khesin, stated, “2012 was a tremendous year for DS Healthcare. We launched new products, expanded into new markets, while increasing our presence in existing ones, commenced quotation on NASDAQ and completed our first acquisition. Our continued growth and expansion, while resulting in an increased net loss for the year, marked another record year of revenues. While our operational expenses increased, we believe such expenses have expedited our continued growth and expansion and we look forward to continued growth in 2013.”
DS Healthcare Group, Inc. (formerly Divine Skin, Inc.)(d/b/a DS Laboratories) and Subsidiaries
Consolidated Balance Sheets
|
| December 31, |
|
| December 31, |
| ||
|
| 2012 |
|
| 2011 |
| ||
ASSETS |
|
|
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|
|
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|
|
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|
| ||
Current Assets |
|
|
|
|
|
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Cash |
| $ | 412,488 |
|
| $ | 1,284,343 |
|
Accounts receivable, net |
|
| 2,125,641 |
|
|
| 1,888,453 |
|
Inventory |
|
| 3,453,950 |
|
|
| 2,174,784 |
|
Prepaid expenses and other current assets |
|
| 159,164 |
|
|
| 57,940 |
|
|
|
|
|
|
|
|
|
|
Total Current Assets |
|
| 6,151,243 |
|
|
| 5,405,520 |
|
|
|
|
|
|
|
|
|
|
Furniture and Equipment, net |
|
| 293,720 |
|
|
| 53,017 |
|
Advances to affiliates |
|
| 17,973 |
|
|
| — |
|
Intangible assets, net |
|
| 1,674,852 |
|
|
| 630,317 |
|
Other assets |
|
| 86,888 |
|
|
| 15,138 |
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS |
| $ | 8,224,676 |
|
| $ | 6,103,992 |
|
|
|
|
|
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|
|
|
|
LIABILITIES AND EQUITY |
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|
|
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Current Liabilities |
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
| $ | 3,032,422 |
|
| $ | 1,021,313 |
|
Credit facility |
|
| 448,658 |
|
|
| — |
|
Other current liabilities |
|
| 580,407 |
|
|
| 77,433 |
|
|
|
|
|
|
|
|
|
|
Total Current Liabilities |
|
| 4,061,487 |
|
|
| 1,098,746 |
|
|
|
|
|
|
|
|
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Long Term Debt |
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| 45,177 |
|
|
| — |
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|
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|
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|
|
|
|
TOTAL LIABILITIES |
|
| 4,106,664 |
|
|
| 1,098,746 |
|
|
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COMMITMENTS AND CONTINGENCIES |
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Equity |
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Preferred stock, $0.001 par value, 30 million shares authorized: 5,500,000 and 10,000,000 shares issued and outstanding at December 31, 2012 and December 31, 2011, respectively |
|
| 5,500 |
|
|
| 10,000 |
|
Common stock, $0.001 par value, 300 million shares authorized: 12,119,705 and 10,502,961 shares issued and outstanding at December 31, 2012 and December 31, 2011, respectively |
|
| 12,120 |
|
|
| 10,503 |
|
Additional paid-in-capital |
|
| 9,244,748 |
|
|
| 6,606,668 |
|
Stock subscription |
|
| (30,000 | ) |
|
| (100,000 | ) |
Accumulated deficit |
|
| (5,097,990 | ) |
|
| (1,506,893 | ) |
|
|
|
|
|
|
|
|
|
Total Shareholders' Equity |
|
| 4,134,378 |
|
|
| 5,020,278 |
|
Non-Controlling Interest |
|
| (16,366 | ) |
|
| (15,032 | ) |
|
|
|
|
|
|
|
|
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Total Equity |
|
| 4,118,012 |
|
|
| 5,005,246 |
|
|
|
|
|
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|
|
|
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TOTAL LIABILITIES AND EQUITY |
| $ | 8,224,676 |
|
| $ | 6,103,992 |
|
DS Healthcare Group, Inc. (formerly Divine Skin, Inc.)(d/b/a DS Laboratories) and Subsidiaries
Consolidated Statements of Operations
|
| For the Years Ended |
| |||||
|
| December 31, |
| |||||
|
| 2012 |
|
| 2011 |
| ||
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|
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|
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Revenue: |
|
|
|
|
|
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Product sales |
| $ | 12,170,198 |
|
| $ | 10,368,735 |
|
Less allowances |
|
| (945,774 | ) |
|
| (695,874 | ) |
|
|
|
|
|
|
|
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Net revenue |
|
| 11,224,424 |
|
|
| 9,672,861 |
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|
|
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|
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Cost of Goods Sold |
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| 6,749,657 |
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| 4,751,961 |
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|
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|
|
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Gross Profit |
|
| 4,474,767 |
|
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| 4,920,900 |
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Operating Costs and Expenses: |
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Selling and marketing |
|
|
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|
|
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Commissions and consulting |
|
| 1,818,937 |
|
|
| 1,392,609 |
|
Other selling and marketing expenses |
|
| 2,017,603 |
|
|
| 1,463,873 |
|
|
|
| 3,836,540 |
|
|
| 2,856,482 |
|
General and administrative |
|
|
|
|
|
|
|
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Salary and personnel costs |
|
| 1,662,481 |
|
|
| 1,203,950 |
|
Professional fees and consulting costs |
|
| 1,385,348 |
|
|
| 1,070,739 |
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Other general and administrative expenses |
|
| 1,201,641 |
|
|
| 783,299 |
|
|
|
| 4,249,470 |
|
|
| 3,057,988 |
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|
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Total operating costs and expenses |
|
| 8,086,010 |
|
|
| 5,914,470 |
|
|
|
|
|
|
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|
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Operating Loss |
|
| (3,611,243 | ) |
|
| (993,570 | ) |
|
|
|
|
|
|
|
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Other Income (Expense) |
|
|
|
|
|
|
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Interest income |
|
| 2,172 |
|
|
| 454 |
|
Interest expense |
|
| (50,305 | ) |
|
| — |
|
Other |
|
| 36,266 |
|
|
| 12,224 |
|
|
|
|
|
|
|
|
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Total other income (expense) |
|
| (11,867 | ) |
|
| 12,678 |
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|
|
|
|
|
|
|
|
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Loss Before Taxes |
|
| (3,623,110 | ) |
|
| (980,892 | ) |
|
|
|
|
|
|
|
|
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Income Tax |
|
| — |
|
|
| — |
|
|
|
|
|
|
|
|
|
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Net Loss |
|
| (3,623,110 | ) |
|
| (980,892 | ) |
|
|
|
|
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|
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Net Loss Attributable to Non-Controlling Interest |
|
| 16,366 |
|
|
| 2,292 |
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Net Loss Attributable to Shareholders |
| $ | (3,606,744 | ) |
| $ | (978,600 | ) |
|
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Basic and Diluted Earnings per Share: |
|
|
|
|
|
|
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Weighted average shares |
|
| 11,106,145 |
|
|
| 10,061,123 |
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Loss per share |
| $ | (0.33 | ) |
| $ | (0.10 | ) |
DS Healthcare Group, Inc. (formerly Divine Skin, Inc.)(d/b/a DS Laboratories) and Subsidiaries
Consolidated Statements of Cash Flows
|
| For the Years Ended |
| |||||
|
| December 31, |
| |||||
|
| 2012 |
|
| 2011 |
| ||
|
|
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Cash Flows from Operating Activities: |
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Net Loss |
| $ | (3,623,110 | ) |
| $ | (980,892 | ) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
| 293,023 |
|
|
| 200,722 |
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Bad debts |
|
| 94,534 |
|
|
| 41,032 |
|
Inventory obsolescence |
|
| 500,000 |
|
|
| 112,652 |
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Stock issued for services |
|
| 704,448 |
|
|
| 116,847 |
|
Warrants issued for financial services |
|
| 4,070 |
|
|
| 134,244 |
|
Warrants vested for other services |
|
| 128,000 |
|
|
| 192,000 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
| 48,800 |
|
|
| (1,304,182 | ) |
Inventory |
|
| (1,619,788 | ) |
|
| (993,105 | ) |
Prepaid expenses and other current assets |
|
| (130,961 | ) |
|
| (5,644 | ) |
Accounts payable and accrued expenses |
|
| 1,347,237 |
|
|
| 417,003 |
|
Other current liabilities |
|
| 443,574 |
|
|
| 56,270 |
|
Net cash used in operating activities |
|
| (1,810,173 | ) |
|
| (2,013,053 | ) |
|
|
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Cash Flows from Investing Activities: |
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|
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|
Purchase of furniture and equipment |
|
| (160,753 | ) |
|
| (50,945 | ) |
Purchase of injection molds |
|
| (38,426 | ) |
|
| — |
|
Disposal of Brazil Joint Venture |
|
| 4,678 |
|
|
| — |
|
Purchase of brand rights |
|
| (143,847 | ) |
|
| — |
|
Purchase of Mexican distributor |
|
| 297,452 |
|
|
| — |
|
Security deposits |
|
| (36,144 | ) |
|
| 2,305 |
|
Net cash used in investing activities |
|
| (77,040 | ) |
|
| (48,640 | ) |
|
|
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Cash Flows from Financing Activities: |
|
|
|
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|
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Net proceeds of credit facility |
|
| 448,658 |
|
|
| — |
|
Net proceeds of notes payable |
|
| 53,900 |
|
|
| — |
|
Proceeds from sale of stock to others |
|
| — |
|
|
| 2,069,500 |
|
Less Issuance costs |
|
| — |
|
|
| (459,769 | ) |
Proceeds from sale of stock under securities purchase agreement |
|
| 732,000 |
|
|
| 1,730,000 |
|
Less Issuance costs |
|
| (146,400 | ) |
|
| (140,100 | ) |
Stock returned and cancelled |
|
| (72,800 | ) |
|
| — |
|
Net cash provided by financing activities |
|
| 1,015,358 |
|
|
| 3,199,631 |
|
|
|
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(Decrease) Increase in cash |
|
| (871,855 | ) |
|
| 1,137,938 |
|
Cash, Beginning of Period |
|
| 1,284,343 |
|
|
| 146,405 |
|
|
|
|
|
|
|
|
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Cash, End of Period |
| $ | 412,488 |
|
| $ | 1,284,343 |
|
|
|
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Supplemental Information: |
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|
|
|
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|
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Cash paid for interest |
| $ | 42,160 |
|
| $ | — |
|
Cash paid for taxes |
| $ | — |
|
| $ | — |
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Non-Cash Items: |
|
|
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|
|
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|
Acquisition of Mexican distributor |
| $ | 1,303,000 |
|
| $ | — |
|
About DS Healthcare Group
DS Healthcare Group, Inc. is a leading developer of hair care, facial care and other personal care products. It markets through online and specialty retailers, distributors, cosmetics wholesalers and salons. Its brands include DS Laboratories (www.DSLaboratories.com), Sigma Skin (www.SigmaSkin.com), Polaris Research Laboratories (www.PolarisReserachLabs.com) and Pure Guild (www.ThePureGuild.com).
Cautionary Note Regarding Forward-Looking Statements
Certain statements in this document and elsewhere by DS Healthcare Group are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such information includes, without limitation, the business outlook, assessment of market conditions, anticipated financial and operating results, strategies, future plans, contingencies and contemplated transactions of the Company. Such forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors which may cause or contribute to actual results of company operations, or the performance or achievements of the company or industry results, to differ materially from those expressed, or implied by the forward-looking statements. DS Healthcare Group undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. Actual results, performance or achievements could differ materially from those anticipated in such forward-looking statements as a result of certain factors, including those set forth in DS Healthcare Group's filings with the Securities and Exchange Commission.