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8-K - 8-K - iSatori, Inc.ifit8k081215.htm

Exhibit 99.1


[exhibit991001.jpg]




FOR IMMEDIATE RELEASE

Contact: Trudy M. Self

Self & Associates

909.336.5685



iSatori Reports Second Quarter and First Six Months 2015 Financial Results



GOLDEN, CO--(MarketWired – August 13, 2015) - iSatori, Inc. (OTCQB: IFIT), an emerging leader in the development and marketing of scientifically engineered nutritional supplements for healthier lifestyles, under the iSatori (www.isatori.com), BioGenetic Laboratories (www.BioGeneticLabs.com), and Energize (www.TryEnergize.com) brands, today announced its second quarter and first six months 2015 results. A complete report of the Company's (GAAP) financial results for the quarter ended June 30, 2015, will be available today on its quarterly report filed with the Securities and Exchange Commission on Form 10-Q.


Total revenues (after returns, discount, and promotional trade allowances) for the quarter ended June 30, 2015, were $2.489 million compared with revenues of $2.918 million in the second quarter 2014, a decrease of 14.7%. The reduction in revenues is primarily a result of the unanticipated decline in revenues of a product mix shift from the sales of the weight loss dietary supplement segment in iSatori’s business, beginning in the third quarter 2014, which was partially offset by sales of new products and product lines in the sports nutrition segments of its business. Additionally, returns and promotions for the weight loss segment of the Company’s business in the second quarter increased in order to help reduce excess inventory levels of these products. As well, the Company incurred legal expenditures in the second quarter related to the merger with FitLife Brands (“FTLF”). As a result, net losses for the second quarter was ($522,712) or $(.04) per share compared with net income of $336,099 or $.02 per share in the previous year.


Total revenues (after returns, discount, and promotional trade allowances) for the first half 2015 were $5.918 million compared with revenues of $6.180 million in the first six months of 2015 resulting in a net loss of ($496,323) or a loss of ($ .04 ) per share compared with net income of $672,337 or $.05 in the prior year period.


“The past 12 months have been transformative for our business,” said Stephen Adelé, Founder and Chief Executive Officer of iSatori.   “The shift in our product mix sales were unexpected, but thankfully our team worked hard to offset more than $2.6-million in non-reoccurring revenues from the weight loss products decline and made up over $2.2-million in our sports nutrition product sales, thus leaving a deficit of $400-thousand in revenues for the first half of this year versus the prior year. And although gross margins are lower than we wished, our management team has taken significant action to help restore our gross margins over the next two quarters, back to levels that are more acceptable for operating profitably again. In the first six months of 2015, we made solid progress in several areas of our business operations to regain profitability. First, we have been very pleased with the acceptance of our new products in the retail marketplace and the results of our efforts to increase product distribution to new and expanded channels.  Our Energize product, for instance, is up 107.9% (or plus $738-thousand) in revenues over the same period in the prior year. We have made good progress in meeting demand for new Bio-Gro™ products, resulting in the reduction of most of our backlog in orders.  Our iSatori business is up 53% (or plus $1.5-million) over the same period in the prior year. We also substantially reduced our outstanding credit line balance with Colorado Business Bank and have paid a considerable amount of prepaid expenses.  This has resulted in less available working capital




on hand. Despite these constraints, iSatori continues to make progress in the advancement of its sports nutrition product lines and will continue to pursue its strategic goals surrounding its growth brands.”


Company Highlights for the first six months of 2015 include:


Maximize Bio-Gro™ Bio-Active Peptides IP.


iSatori is committed to maximizing its intellectual property including the bio-active peptides found only in Bio-Gro™. The company presented its newest clinical study work on Bio-Gro™ at the most recent ISSN and NSCA scientific and sports national conferences in June and July 2015. Results of the study were positive and supported performance and safety. iSatori plans to continue to invest in its intellectual property.


New Product Development.


Since December 31, 2014, iSatori launched two new products to complement its growing Bio-Gro™ product line.  Pre-Gro™,  a pre-workout powder designed to deliver a high energy, muscle-building workout experience, fortified with patent-pending, clinically tested Bio-Gro™ Bio-Active Peptides and HydroMax® patented, stabilized glycerol designed to provide a noticeable muscle pump effect and  trigger new muscular growth. iSatori also launched a new flavor of Hyper-Gro®, Chocolate Peanut Butter, and expects to introduce additional flavors later in 2015.


New Distribution Customers.


In April, iSatori was notified by GNC that GNC planned to expand its stocking of iSatori Bio-Gro™, Hyper-Gro®, and Pre-Gro™ from 1,100 corporate stores up to approximately 3,000 corporate stores. The shipments for those orders were fulfilled in May and July respectively.


In the second quarter, iSatori placed its Energize 28-count tablet nationally at CVS Health drugstores and shipped initial purchase orders from Rite-Aid drugstores for its Energize product to increase distribution in Rite-Aid drugstores, from partial to full national distribution. This will increase iSatori’s retail footprint by adding more than 11,000+ retail stores to its domestic distribution—increasing the Company’s ACV (all commodity volume, a measure of maximum retail distribution volume) from 18.6% to 34.1%,  including such current retail distribution as Walmart, Walgreens, Super Value, Meijer, and other food, drug, and mass retailers.


Celebrity-Athlete Full Feature Movie.


In the first quarter of 2015, iSatori signed a multi-year endorsement agreement with CT Fletcher. Deemed one of the most influential and motivated fitness trainers of our time, CT Fletcher will be the center of a new feature film documentary, titled CT Fletcher: My Magnificent Obsession (Generation Iron//Film by Vlad Yudin, 2015). The movie is expected to premiere September 17, 2015, at the Palms Casino in Las Vegas, Nevada. Management at iSatori is excited about the new movie and with future product development opportunities relating to the agreement with CT Fletcher.






Condensed Balance Sheet (Unaudited)


 

June 30,

 

December 31,

ASSETS

2015

 

2014

Current assets:

 

 

 

 

 

Cash and cash equivalents

$

390,112 

 

$

738,725 

Accounts receivable trade

 

1,349,065 

 

 

925,506 

Note receivables - current portion

 

23,593 

 

 

28,939 

Inventories

 

2,158,853 

 

 

2,483,602 

Assets held for sale

 

 

 

34,979 

Prepaid expenses

 

772,552 

 

 

217,668 

Total current assets

 

4,694,175 

 

 

4,429,419 

 

 

 

 

 

 

Property and equipment:

 

 

 

 

 

Leasehold improvements

 

11,485 

 

 

11,485 

Furniture and fixtures

 

196,025 

 

 

128,902 

Office equipment

 

110,418 

 

 

57,408 

Computer equipment

 

332,171 

 

 

332,171 

Dies and cylinders

 

57,317 

 

 

43,942 

Less accumulated depreciation

 

(467,091)

 

 

(425,238)

Net property and equipment

 

240,325 

 

 

148,670 

 

 

 

 

 

 

Note receivable – net of current portion

 

52,695 

 

 

52,695 

 

 

 

 

 

 

Other assets:

 

 

 

 

 

Deferred tax asset, net

 

57,314 

 

 

57,314 

Deposits and other assets

 

33,799 

 

 

45,207 

Total other assets

 

91,113 

 

 

102,521 

Total assets

$

5,078,308 

 

$

4,733,305 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Trade accounts payable

$

1,905,258 

 

$

819,918 

Accrued expenses

 

236,645 

 

 

253,208 

Deferred revenues

 

 

 

191,127 

Deferred tax liability, net

 

57,314 

 

 

57,314 

Line of credit

 

1,275,000 

 

 

1,620,519 

Notes payable

 

211,321 

 

 

15,708 

Total current liabilities

 

3,685,538 

 

 

2,957,794 

 

 

 

 

 

 

Long-term liabilities

 

 

 

 

 

Derivative liability

 

 

 

152,849 

 

 

 

 

 

 

Commitments and contingencies (Notes 1,2,5, and 6)

 

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity:

 

 

 

 

 

Convertible preferred stock, $0.01 par value, 750,000 shares authorized; 22,500 shares issued and outstanding ($450,000 of liquidation value)

 

225 

 

 

225 

Common stock, $0.01 par value, 56,250,000 shares authorized; 13,368,791 shares issued and outstanding

 

133,688 

 

 

129,093 

Additional paid-in capital

 

5,058,077 

 

 

4,796,241 

Accumulated deficit

 

(3,799,220)

 

 

(3,302,897)

Total stockholders’ equity

 

1,392,770 

 

 

1,622,662 

Total liabilities and stockholders' equity

$

5,078,308 

 

$

4,733,305 






Condensed Statement of Operations (Unaudited)


 

Three Month Period Ended

 

Six Month Period Ended

 

June 30

 

June 30

 

June 30

 

June 30

 

2015

 

2014

 

2015

 

2014

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Product revenue (Net of returns and discounts)

$

2,460,676 

 

$

2,877,496 

 

$

5,859,116 

 

$

6,096,740 

Royalty revenue

 

18,774 

 

 

30,501 

 

 

37,993 

 

 

63,127 

Other revenue

 

9,442 

 

 

10,370 

 

 

20,607 

 

 

19,767 

Total revenue

 

2,488,892 

 

 

2,918,367 

 

 

5,917,716 

 

 

6,179,634 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

1,494,658 

 

 

1,306,245 

 

 

3,204,205 

 

 

2,550,043 

Gross profit

 

994,234 

 

 

1,612,122 

 

 

2,713,511 

 

 

3,629,591 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

Selling and marketing

 

497,720 

 

 

477,413 

 

 

1,123,165 

 

 

1,260,101 

Salaries and labor related expenses

 

586,531 

 

 

600,968 

 

 

1,205,785 

 

 

1,248,381 

Administration

 

374,983 

 

 

299,775 

 

 

700,359 

 

 

513,753 

Depreciation and amortization

 

25,176 

 

 

20,015 

 

 

48,260 

 

 

39,144 

Total operating expenses

 

1,484,410 

 

 

1,398,171 

 

 

3,077,569 

 

 

3,061,379 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

(490,176)

 

 

213,951 

 

 

(364,058)

 

 

568,212 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense)

 

10,741 

 

 

204,642 

 

 

(57,482)

 

 

234,842 

Financing expense

 

(15,385)

 

 

(9,476)

 

 

(27,746)

 

 

(30,827)

Interest expense

 

(20,096)

 

 

(9,636)

 

 

(36,311)

 

 

(20,685)

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

(514,916)

 

 

399,481 

 

 

(485,597)

 

 

751,542 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

(7,796)

 

 

(63,382)

 

 

(10,726)

 

 

(79,205)

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

(522,712)

 

$

336,099 

 

$

(496,323)

 

$

672,337 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per common share  

 

 

 

 

 

 

 

 

 

 

 

Basic

$

(0.04)

 

$

0.03 

 

$

(0.04)

 

$

0.05 

Diluted

$

(0.04)

 

$

0.02 

 

$

(0.04)

 

$

0.05 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

13,371,791 

 

 

12,886,401 

 

 

13,089,814 

 

 

12,883,026 

Diluted

 

13,371,791 

 

 

13,686,754 

 

 

13,089,814 

 

 

13,714,797 


A complete report of the Company's (GAAP) financial results for the quarter  and six months ended June 30, 2015, will be available via its quarterly report filed with the Securities and Exchange Commission on Form 10-Q in the coming weeks.


About iSatori, Inc.


iSatori is a consumer products firm that develops and sells scientifically engineered nutritional products through online marketing, Fortune 500 retailers, and thousands of retail stores around the world. The Company is headquartered in Golden, Colorado, and its common stock trades on the OTCQB under the symbol "IFIT." More information about the Company is available at http://www.isatori.com.





No Offer or Solicitation


This communication is not intended to and does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe for any securities or the solicitation of any vote or approval in any jurisdiction in connection with the proposed merger of iSatori, Inc. with FitLife Brands, Inc. (“FitLife”) or otherwise, nor shall there be any sale, issuance, or transfer of securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.


Important Information Has Been and Will Be Filed with the SEC


FitLife has filed with the SEC a registration statement on Form S-4 that includes a preliminary Proxy Statement of iSatori that also constitutes a preliminary prospectus of FitLife. The registration statement has not yet become effective. FitLife and iSatori plan to mail the definitive Proxy Statement/Prospectus to iSatori’s shareholders in connection with the transaction. INVESTORS AND SHAREHOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC CAREFULLY BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT ISATORI, FITLIFE, THE TRANSACTION, AND RELATED MATTERS. Investors and shareholders will be able to obtain free copies of the definitive Proxy Statement/Prospectus and other documents filed with the SEC by iSatori and FitLife through the website maintained by the SEC at www.sec.gov. In addition, investors and shareholders will be able to obtain free copies of the definitive Proxy Statement/Prospectus and other documents filed by iSatori with the SEC by contacting the Corporate Secretary at 15000 W. 6th Avenue, Golden, CO  80401 or by calling 303.215.9174, and will be able to obtain free copies of the definitive Proxy Statement/Prospectus and other documents filed by FitLife by contacting FitLife’s Chief Financial Officer at 4509 143rd Street, Suite 1., Omaha, NE 68137 or by calling 402.333.5260.


Participants in the Solicitation


iSatori and FitLife and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of iSatori in respect of the transaction described the Proxy Statement/Prospectus. Information regarding the persons who may, under the rules of the SEC, be deemed participants in the solicitation of the shareholders of iSatori in connection with the proposed transaction, including a description of their direct or indirect interests, by security holdings or otherwise, will be set forth in the definitive Proxy Statement/Prospectus when it is filed with the SEC. Information regarding iSatori’s directors and executive officers is contained in iSatori’s Annual Report on Form 10-K for the year ended December 31, 2014, which is filed with the SEC. Information regarding FitLifes’s directors and executive officers is contained in FitLife’s Annual Report on Form 10-K for the year ended December 31, 2014 and its Proxy Statement on Schedule 14A, dated May 4, 2015, which are filed with the SEC.


Forward-Looking Statements


Statements made in this news release relating to the Company's future sales, expenses, revenue, product developments, and all other statements except statements of historical fact, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We have used the words "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "should," "will," "potential," and similar terms and phrases to identify forward-looking statements in this press release. These statements are based on assumptions and estimates that management believes are reasonable based on currently available information; however, management's assumptions and the Company's future performance are both subject to a wide range of business risks and uncertainties, and there is no assurance that these goals and projections can or will be met. Any number of factors could cause actual results to differ materially from those in the forward-looking statements, including, but not limited to, the timing and extent of changes in demand for the Company's products, the availability and price of ingredients necessary to manufacture such products, and the outcome of any current or future litigation regarding such products or similar products of competitors. Please see our Risk Factor disclosures included in our Registration Statement on Form S-1, as amended, initially filed with the Securities and Exchange Commission on April 30, 2013, and in subsequent filings with the Securities and Exchange Commission. All future written or oral forward-looking statements attributable to us or persons acting on our behalf




are expressly qualified in their entirety by the previous statements. The forward-looking statements herein speak as of the date of this press release. We undertake no obligation to update any information contained herein or to publicly release the results of any revisions to any forward-looking statements that may be made to reflect events or circumstances that occur, or that we become aware of, after the date of this press release.