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.
Contacts: Digital Shelf Space Corp. Jeff Sharpe President &
CEO 604-736-7977 604-736-7944 (FAX) jeff@digitalshelfspace.com
www.digitalshelfspace.com Investor Cubed Inc. Investor Relations
(647) 258-3311 or Toll Free: (888) 258-3323 (416) 363-7977 (FAX)
info@investor3.ca
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