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Or get the panic sellers and weak hands to stop selling cheap shares to them which only allows them to keep their cash cow cycle going. I don't understand why people don't understand that and continue to let it happen.
FITX
That's your opinion, and complete opposite of me and most others here. Going to trips was bad for traders in for short term flips, but to the longs like me, doesn't matter. By the way, the "trips" you keep referring to was one day for a few sells at .0009, that's it and it never closed in trips, so really not so "dramatic" of a movement. We're obviously rebounding back up. This stock is nowhere near my long term maturation point. What it does in the interim doesn't mean much to me.
FITX
Regardless of any updates to the website, whether there is or is not additional dilution, doesn't matter to me at this stage. In penny stocks, I always assume worst-case scenario with full dilution, that way I'm never disappointed. I don't dwell on it, I expect it, and when it doesn't happen, that's a bonus. As long as the company continues to make huge strides and progress, which they are clearly doing, that tells me the capital is being used very wisely and strategically and will increase shareholder value in the future as a result.
FITX
Creative Edge Nutrition, Inc. Signs Multiple Country Distribution Contracts For Full Scale Product Distribution
MADISON HEIGHTS, MI / ACCESSWIRE / November 25, 2013 /
Creative Edge Nutrition Inc. (FITX:Pink Sheets) is proud to announce today that after months of market research and negotiation, it has entered into a sales and distribution agreement with Phoenix-Distribution, a large distributor in the countries of Australia and New Zealand.
Leonard Armenta VP of Brand Management/Marketing says “Teaming up with Phoenix Distribution is the next step in the execution of our corporate vision. They will give us a large presence in the Australian market with over 500 stores and in the New Zealand market with over 300 stores.”
Bill Chaaban, CEO stated “we are excited to provide access to our premium supplements to the commonwealth countries. Our brands are now currently available outside the United States in Canada, Australia and New Zealand. We will continue to focus our efforts to achieve full market penetration worldwide. We will continue to implement our vision of vertical integration for our dietary supplement products. These are exciting times for our company and its shareholders as we continue to make monumental strides in the nutrition and medical marijuana industries.”
http://finance.yahoo.com/news/creative-edge-nutrition-inc-signs-133000962.html
Like us on Facebook https://www.facebook.com/CenergyNutrition
About Creative Edge Nutrition, Inc.
Creative Edge Nutrition is a holding company and a Nutritional Supplement Company focused on developing innovative, high quality supplements. The company offers a broad spectrum of capsules, tablets, and powders, as well as science based products in the principal categories of weight management, nutrition challenges, energy and fitness. The Company manufactures under strict GMP guidelines at GMP Certified and/or FDA registered facilities. http://www.cenergynutrition.com/ and https://www.facebook.com/CenergyNutrition
About http://www.supplementstogo.com/
Supplementstogo.com is one of the leading online retailers in the market today for discount supplements! Always focusing on the hottest products and what provides the best results for their customers, Supplements To Go has made a great name for themselves in the world of nutrition. To find out more about SupplementsToGo.com, please view the site http://www.supplementstogo.com/.
About http://www.hempnorthamerica.com/
Hemp North America.com will provide premium grade Hemp Protein supplements to those looking for a natural and lactose free product. Consumers can count on us for bringing the latest scientific findings in the supplement world to market. Also all our products can be found for sale and purchase on all the sites we own http://www.hempnorthamerica.com/ http://www.supplementstogo.com/ , http://www.worldclassnutrition.com/ , http://www.a-z-nutrition.com/
About http://www.chianorthamerica.com/
We will have the best value at the best price; The products which will be manufactured in state-of-the-art facilities GMP Certified and FDA Compliant , and packaged and stored in conditions of the highest standard. A few of our goals are to educate the public with current, science-based information, and provide the highest quality natural products. http://www.chianorthamerica.com/ will strive to become the site and brand of choice for health-conscious consumers. Also all our products will be able to be found for sale and purchase on all the sites we own http://www.chianorthamerica.com/ http://www.supplementstogo.com/ , http://www.worldclassnutrition.com/ , http://www.a-z-nutrition.com/
About http://www.a-z-nutrition.com/
A-Z-Nutrition.com is one of the best known e-tailers of discount nutritional supplements. Providing its customers over a decade of quality products at the best prices around, A-Z-Nutrition supports its customers with a portal that is easy to use and to the point. To find out more about them, please view their site http://www.a-z-nutrition.com/.
About http://www.worldclassnutrition.com/
World Class Nutrition – Founded in 1999, early in the internet age of web based super stores, World Class Nutrition is a successful nutritional supplement/fitness equipment retailer due to providing their loyal customers top level support and great prices on their favorite supplement brands.
FITX
Exactly. I can't believe how strategic this was done with this relatively low amount of shares in comparison to what has been built so far. Amazing!
FITX
In terms of what?
FITX
UPDATED DD FOR BOTH FITX BUSINESS DIVISIONS!!!:
MEDICINAL MARIJUANA SECTOR (CEN-BIOTECH):
11/21/13: CEN Biotech Breaks Ground to Add 58,000 sq. ft. to Its Future Medicinal Marijuana Operation.
http://online.wsj.com/article/PR-CO-20131121-906358.html?dsk=y
11/21/13: Another firm applies to grow marijuana.
http://blogs.windsorstar.com/2013/11/12/another-firm-applies-to-grow-marijuana/
11/19/13: CEN Biotech, Inc. Leases Property for Medical Marijuana Product and Sales.
http://www.marketwatch.com/story/cen-biotech-inc-leases-property-for-medical-marijuana-product-and-sales-2013-11-19
11/13/13: Creative Edge Nutrition, Inc. Hires 5W Public Relations as Agency of Record.
http://finance.yahoo.com/news/creative-edge-nutrition-inc-hires-133000593.html
11/13/13: Endexx and CEN Biotech Launch Operations in Canada.
http://online.wsj.com/article/PR-CO-20131113-909799.html
10/29/13: A New Audio Interview With Bill Chaaban, CEO of Creative Edge Nutrition, Inc.
http://finance.yahoo.com/news/audio-interview-bill-chaaban-ceo-113000038.html
9/6/13: Endexx Provides Contract Clarification (regarding CEN-Biotech) and Compliance Requirements.
http://online.wsj.com/article/PR-CO-20130909-906514.html
9/6/13: Creative Edge Nutrition's Subsidiary CEN Biotech, Inc. Announces a New Contract With Endexx Corporation to Provide Software to Track the Production and Sale of Medicinal Marijuana.
http://finance.yahoo.com/news/creative-edge-nutritions-subsidiary-cen-123000415.html
9/6/13: Endexx Corporation and CEN Biotech, Inc. Enter Into Business Contract.
http://finance.yahoo.com/news/endexx-corporation-cen-biotech-inc-123000372.html
9/5/13: Creative Edge Nutrition Announces the Formation of Cen Biotech Inc. for Its Medicinal Marijuana Business Sector.
http://online.wsj.com/article/PR-CO-20130905-906271.html
6/5/13: Creative Edge Nutrition Announces Ground Breaking Products For The Medical Marijuana Field- Hemp Tea And Coffee Additive.
http://finance.yahoo.com/news/creative-edge-nutrition-announces-ground-123000801.html
4/18/13: Creative Edge Nutrition, Inc. Announces the Second product into the Medical Marijuana Sector.
http://finance.yahoo.com/news/creative-edge-nutrition-inc-announces-120000832.html
3/25/13: Creative Edge Nutrition, Inc. Announces the Entrance into the Medical Marijuana Sector.
http://finance.yahoo.com/news/creative-edge-nutrition-inc-announces-120200129.html
ADDITIONAL FITX DD (Provided by OhManIDied):
--As of October 1st, 2013 there were 156 applicants to Canada Health. In mid-November, there are currently only 5-6 companies that are known to be authorized. FITX is 5th, and is the 4th newest government-sponsored grower.
--Every authorized grower is expected to set their own prices. Growers can expand their license to grow (with more plants permitted) by obtaining more registered patients.
--Authorized growers will be permitted to export marijuana to other countries.
--For every 1,000 patients, revenue is expected to grow by $700,000.
--As of December, 2012, Ontario had the second-highest number of people authorized to possess (ATP). This is where FITX is operating.
Here are the top 3 ATP-dense regions: (Dec. 2012 data)
1) British Columbia 13,362
2) Ontario 8,617
3) Nova Scotia 1,864
--Health Canada Marijuana Statistics:
http://www.hc-sc.gc.ca/dhp-mps/marihuana/stat/index-eng.php#a12
--List of Authorized Canadian Growers (check back for updates):
http://www.hc-sc.gc.ca/dhp-mps/marihuana/info/list-eng.php
--BONUS VIDEO:
http://windsor.ctvnews.ca/interest-in-medical-marijuana-facilities-continues-to-grow-1.1541817
SPORTS NUTRITION SECTOR (CENERGY):
10/17/13: Creative Edge Nutrition, Inc. Adds Additional Product to Bodybuilding.com.
http://online.wsj.com/article/PR-CO-20131017-906608.html
10/10/13: Creative Edge Nutrition Signs Exclusive Distribution Deal With Europa Sports.
http://online.wsj.com/article/PR-CO-20131010-906199.html
10/8/13: Creative Edge Nutrition Ships First Order to Bodybuilding.com.
http://online.wsj.com/article/PR-CO-20131008-905427.html
8/27/13: Creative Edge Nutrition Received Vendor Sales Approval for Nutritionexpress.com.
http://finance.yahoo.com/news/creative-edge-nutrition-received-vendor-123000222.html
7/16/13: Creative Edge Nutrition Signs Retail Contract With Bodybuilding.com.
http://finance.yahoo.com/news/creative-edge-nutrition-signs-retail-115000454.html
7/15/13: Creative Edge Nutrition, Inc. Letter to Shareholders.
http://finance.yahoo.com/news/creative-edge-nutrition-inc-letter-133733840.html
6/28/13: Dr. Sam Alawieh Will Head Up Creative Edge Nutrition Advisory Team.
http://finance.yahoo.com/news/dr-sam-alawieh-head-creative-120000421.html
6/27/13: Creative Edge Nutrition Announces They Are an Approved Vendor of Amazon.com.
http://finance.yahoo.com/news/creative-edge-nutrition-announces-approved-120000562.html
6/25/13: Creative Edge Nutrition, Announces the Addition of Dr. Sam Alawieh, to Their Advisory Team.
http://finance.yahoo.com/news/dr-sam-alawieh-head-creative-120000421.html
5/31/13: Creative Edge Nutrition, Inc. Announces The Addition of Online Retailer www.ProSource.net.
http://www.prnewswire.com/news-releases/creative-edge-nutrition-inc-announces-the-addition-of-online-retailer-wwwprosourcenet-209641151.html
5/8/13: Creative Edge Nutrition, Inc. Announces The Acquisition of 3 Nutrition Super Stores.
http://finance.yahoo.com/news/creative-edge-nutrition-inc-announces-123800879.html
5/1/13: Creative Edge Nutrition, Inc. Expands Industry Management Team.
http://finance.yahoo.com/news/creative-edge-nutrition-inc-expands-120000610.html
2/6/13: Creative Edge Nutrition, Inc. Announces GNC Vendor number.
http://finance.yahoo.com/news/creative-edge-nutrition-inc-announces-133200489.html
9/27/12: Creative Edge Nutrition Inc Completes Acquisition Of Sci-Fit And Nature's Science Brands.
http://www.prnewswire.com/news-releases/creative-edge-nutrition-inc-acquires-sci-fit-and-natures-science-brands-171510931.html
9/26/12: Creative Edge Nutrition Inc Acquires A-Z-Nutrition.com.
http://www.prnewswire.com/news-releases/creative-edge-nutrition-inc-acquires-a-z-nutritioncom-171325711.html
8/20/12: Creative Edge Nutrition Inc Acquires SCD Enterprises, LLC.
http://www.prnewswire.com/news-releases/creative-edge-nutrition-inc-acquires-scd-enterprises-llc-166749356.html
7/31/12: Creative Edge Nutrition Inc Acquires Innovative Fulfillment Corp.
http://finance.yahoo.com/news/creative-edge-nutrition-inc-acquires-125200946.html
5/15/12: Creative Edge Nutrition Inc Completes Acquisition of Science Defined Nutrition.
http://www.prnewswire.com/news-releases/creative-edge-nutrition-inc-completes-acquisition-of-science-defined-nutrition-151596435.html
FITX
This was suggested last week too. At first, the 3 store purchase in Canada made little sense too me, but now with the recent events and the kick off of the Cen-Biotech business model in Canada as well, that 3 brick and mortar store purchase could make a whole lot more sense now...my eyebrow is raised...
FITX
Cut and pasted straight out of their recent 10Q:
http://biz.yahoo.com/e/131119/ecdc10-q.html
ECDC
Quietly huge news from the recent 10Q that everyone is ignoring:
StudentConnect
The Company has commercially launched StudentConnect, our school transportation and safety division. We executed 5-year contracts with school Districts in South Carolina, Kentucky, Louisiana, and Arkansas. We intend to have all 4 school districts fully installed and implemented for the school year beginning January 2014. In addition, we are continuing pilot testing and discussions with school districts in GA, SC, KY, AR, AL, NC and LA. We anticipate additional agreements executed by year end for further deployment in 2014.
We executed 2 agreements with Verizon Wireless, The Verizon Partner Program and the Verizon Master Services Agreements (MSA). The MSA agreement gives us access to the Verizon network and grants Verizon wireless exclusive right to provide network services to all schools utilizing StudentConnect. Under the Verizon Partner Program, Verizon and StudentConnect shall engage in joint sales and marketing of the StudentConnect product to school districts across the country. Verizon's sales force shall market StudentConnect to school districts nationwide.
We anticipate having access to the Verizon sales force which will allow us to reach greater audience for the continued and accelerated growth of the StudentConnect division of our business. To meet the potential demand we have expanded our technical and customer service operation and plan to increase our warehousing capabilities.
ECDC
Would love to see the link for that claim too while you're at it. Trust me, I know very well how it works. Too funny...:)
MSLP
You should probably inform the MP physicians and scientists who make the formulations of your discovery. I'm sure they are completely unaware of these ancient documents. Also, please inform the FDA since they do regulate supplements and have clearly missed that MP is using this illegal substance for the past year without penalty. Good work detective. On that note, I just drank down my illegal creatine nitrate Assault about an hour ago. The taste is oh so sweet. I better get all the fixes I can before they take it off the streets.
MSLP
Again, as per my last post to you, anything current and relevant to MP regarding this topic? That's what I'm waiting on. A lot of things have changed since early 2011 my friend. You should get with the times. Your posts would be more useful that way. I'm sure if it was still illegal in current times of 2013, almost 2014, the physicians making the formulations would proooobably have not included it. Just a thought. Keep digging.
MSLP
Seeing as the letter was dated early 2011, I'm thinking there is a good chance the issue was resolved (although probably was never actually an "issue" for MP) since it is now 2013, almost 2014, and there's been no issue regarding this for the past year regarding MP's use of it. That would be the link I'm interested in, not the remote past. Kind of like when people describe the current pps in terms of what it would have been pre-split, which is irrelevant at this point. Move to the current times bro.
MSLP
Gee, that would be an unexpected shocker:). I like to check in few times a month, looks like the same ole...
MSLP
It's very surprising with all the recent news. I've not seen anything like this with so much coming potential be so immobile in movement (although we have remained at our new base around .004 up from .001 a couple months ago, so I see that as very positive).
FITX
The bigger problem is the weak hands and 2 tick flippers continuously giving them shares to keep their piggy bank cycle going. If more people would understand that and stop selling so low, we'd be able to move up...
FITX
MUST READ LINKS FOR BOTH FITX BUSINESS SECTORS:
MEDICINAL MARIJUANA SECTOR (CEN-BIOTECH):
11/21/13: Another firm applies to grow marijuana.
http://blogs.windsorstar.com/2013/11/12/another-firm-applies-to-grow-marijuana/
11/19/13: CEN Biotech, Inc. Leases Property for Medical Marijuana Product and Sales.
http://www.marketwatch.com/story/cen-biotech-inc-leases-property-for-medical-marijuana-product-and-sales-2013-11-19
11/13/13: Creative Edge Nutrition, Inc. Hires 5W Public Relations as Agency of Record.
http://finance.yahoo.com/news/creative-edge-nutrition-inc-hires-133000593.html
11/13/13: Endexx and CEN Biotech Launch Operations in Canada.
http://online.wsj.com/article/PR-CO-20131113-909799.html
10/29/13: A New Audio Interview With Bill Chaaban, CEO of Creative Edge Nutrition, Inc.
http://finance.yahoo.com/news/audio-interview-bill-chaaban-ceo-113000038.html
9/6/13: Endexx Provides Contract Clarification (regarding CEN-Biotech) and Compliance Requirements.
http://online.wsj.com/article/PR-CO-20130909-906514.html
9/6/13: Creative Edge Nutrition's Subsidiary CEN Biotech, Inc. Announces a New Contract With Endexx Corporation to Provide Software to Track the Production and Sale of Medicinal Marijuana.
http://finance.yahoo.com/news/creative-edge-nutritions-subsidiary-cen-123000415.html
9/6/13: Endexx Corporation and CEN Biotech, Inc. Enter Into Business Contract.
http://finance.yahoo.com/news/endexx-corporation-cen-biotech-inc-123000372.html
9/5/13: Creative Edge Nutrition Announces the Formation of Cen Biotech Inc. for Its Medicinal Marijuana Business Sector.
http://online.wsj.com/article/PR-CO-20130905-906271.html
6/5/13: Creative Edge Nutrition Announces Ground Breaking Products For The Medical Marijuana Field- Hemp Tea And Coffee Additive.
http://finance.yahoo.com/news/creative-edge-nutrition-announces-ground-123000801.html
4/18/13: Creative Edge Nutrition, Inc. Announces the Second product into the Medical Marijuana Sector.
http://finance.yahoo.com/news/creative-edge-nutrition-inc-announces-120000832.html
3/25/13: Creative Edge Nutrition, Inc. Announces the Entrance into the Medical Marijuana Sector.
http://finance.yahoo.com/news/creative-edge-nutrition-inc-announces-120200129.html
SPORTS NUTRITION SECTOR (CENERGY):
10/17/13: Creative Edge Nutrition, Inc. Adds Additional Product to Bodybuilding.com.
http://online.wsj.com/article/PR-CO-20131017-906608.html
10/10/13: Creative Edge Nutrition Signs Exclusive Distribution Deal With Europa Sports.
http://online.wsj.com/article/PR-CO-20131010-906199.html
10/8/13: Creative Edge Nutrition Ships First Order to Bodybuilding.com.
http://online.wsj.com/article/PR-CO-20131008-905427.html
8/27/13: Creative Edge Nutrition Received Vendor Sales Approval for Nutritionexpress.com.
http://finance.yahoo.com/news/creative-edge-nutrition-received-vendor-123000222.html
7/16/13: Creative Edge Nutrition Signs Retail Contract With Bodybuilding.com.
http://finance.yahoo.com/news/creative-edge-nutrition-signs-retail-115000454.html
7/15/13: Creative Edge Nutrition, Inc. Letter to Shareholders.
http://finance.yahoo.com/news/creative-edge-nutrition-inc-letter-133733840.html
6/28/13: Dr. Sam Alawieh Will Head Up Creative Edge Nutrition Advisory Team.
http://finance.yahoo.com/news/dr-sam-alawieh-head-creative-120000421.html
6/27/13: Creative Edge Nutrition Announces They Are an Approved Vendor of Amazon.com.
http://finance.yahoo.com/news/creative-edge-nutrition-announces-approved-120000562.html
6/25/13: Creative Edge Nutrition, Announces the Addition of Dr. Sam Alawieh, to Their Advisory Team.
http://finance.yahoo.com/news/dr-sam-alawieh-head-creative-120000421.html
5/31/13: Creative Edge Nutrition, Inc. Announces The Addition of Online Retailer www.ProSource.net.
http://www.prnewswire.com/news-releases/creative-edge-nutrition-inc-announces-the-addition-of-online-retailer-wwwprosourcenet-209641151.html
5/8/13: Creative Edge Nutrition, Inc. Announces The Acquisition of 3 Nutrition Super Stores.
http://finance.yahoo.com/news/creative-edge-nutrition-inc-announces-123800879.html
5/1/13: Creative Edge Nutrition, Inc. Expands Industry Management Team.
http://finance.yahoo.com/news/creative-edge-nutrition-inc-expands-120000610.html
2/6/13: Creative Edge Nutrition, Inc. Announces GNC Vendor number.
http://finance.yahoo.com/news/creative-edge-nutrition-inc-announces-133200489.html
FITX
Do you have some pictures you are able to provide to the board from your research? TIA.
FITX
A long ignores the day to day, week to week, or month to month movements. They care more about 2-3 years down the road for starters. The huge pops or drops in the meantime don't mean anything to me since they are not in my time window, although can be fun to watch...
FITX
I did see that NJ caption under the photo the first time I read the article and it threw me off. At first, I thought they had picked NJ to begin CEN Biotech operations. Although the photo did say NJ, I don't know if it was a generic photo used for the article, or actually a true grow operation owned by CEN Biotech.
FITX
So the fact that Bill has continued to build and vertically integrate various companies and products into the FITX umbrella company portfolio as he said he would from day 1 is somehow lying since it takes dilution for raising capital to do these things? Please understand that every single penny stock company dilutes hugely to raise capital in order to carry out these tremendous strides. Many much more than what FITX had to do. People's lives (and those who have to endure listening) would be so much easier if they understand this basic 101 concept. The strides he continues to make with deep market penetration of the Cenergy line, production of multiple products in large quantity to be able to fulfull demands from all distribution sites, R+D for those products, recent lease of a large building for legal medical marijuana production, just to name a few are clear evidence that Bill has used any previous dilution strategically and flawlessly. To not be able to see this obvious progression raises the question of who is actually the wise one...
FITX
With the continued legislation momentum towards approving marijuana in the states, will see the company spread operations to those locations. In the meantime, this is a genius plan. We are taking advantage of a legalized marketplace until others become available. As Bill stated in his recent interview, they had a pioneering plan of doing this. It looks like that plan is now unfolding perfectly and strategically. My only thought now is should I sell a small fraction of shares in the multi-pennies, or wait for dimes now:)...
FITX
I'm sure it will be soon. It was just announced so I'm sure the website hasn't been updated that quickly.
FITX
Regarding the SEC investigation in the CC:
Gary Davis:
"I mean, this in SEC enquiry was really revolved around the reporting of 2010 and 2011. And as Richard said, we've been having meetings and the correspondence that we've had from the SEC to date is showing that there is nothing that will have a material impact on the company. So it's all looking good. It's going to come forward without any impact."
MSLP
Here's a link to their amazing client list that will blow you away. Read through this list of huge household name celebrities and companies (such as McDonald's, GQ, 1800 Tequila, Barne's & Noble, Microsoft MSN, Welch's, Cold-EEZE, IHOP, Wyndham, Snoop Dogg, Pam Anderson to name a few), and you'll quickly see this is not going to be a small time operation:
http://www.5wpr.com/clients/index.cfm
5W was named 2013 PR Agency of the year!
Creative Edge Nutrition, Inc. Hires 5W Public Relations as Agency of Record
http://www.marketwired.com/press-release/creative-edge-nutrition-inc-hires-5w-public-relations-as-agency-of-record-pinksheets-fitx-1851674.htm
November 13, 2013 08:30 ET
MADISON HEIGHTS, MI--(Marketwired - Nov 13, 2013) - Creative Edge Nutrition, Inc. and subsidiary CEN Biotech, Inc. (OTC Pink: FITX), a nutritional supplement company focusing on active lifestyles, today announced they have retained 5W Public Relations as their agency of record. 5W Public Relations (www.5wpr.com), one of the 25 largest independently owned PR firms in the US, will execute a comprehensive public relations program designed to increase awareness of Creative Edge Nutrition and its subsidiary CEN Biotech, Inc. and its variety of products with the goal of becoming recognized as the leading authority in nutritional supplement products.
Bill Chaaban, President and CEO, commented, "We are ecstatic to have retained and to be working with one of the top Public Relation firms in the country. Our shareholders will see the need for such a firm in the near future."
CEN Biotech, Inc. was established to cultivate and sell medicinal marijuana in the jurisdictions where it can be lawfully produced and sold.
About 5W Public Relations Agency
www.5wpr.com
5W Public Relations (5W) is a full-service PR Agency that helps some of the world's most admired brands, corporations, issues and personalities achieve more. 5W's bold, resourceful and thoroughly modern approach helps some of the most respected names in B2C (Beauty & Fashion, Consumer Brands, Entertainment, Food & Beverage, Health & Wellness, Technology, Travel & Hospitality); B2B (Corporate Communications, Reputation Management, CSR, Sustainability Communications); Public Affairs, Government Relations and Crisis Communications move their businesses forward. Headquartered in New York with an office in Los Angeles, 5W's energetic, fast-paced, and focused culture earned the PR firm the Gold Stevie® Award for 2013 PR Agency of the Year and a spot on the Inc. 500 list.
About Creative Edge Nutrition, Inc.
Creative Edge Nutrition is a holding company and a Nutritional Supplement Company focused on developing innovative, high quality supplements. The company offers a broad spectrum of capsules, tablets, and powders, as well as science based products in the principal categories of weight management, nutrition challenges, energy and fitness. The Company manufactures under strict GMP guidelines at GMP Certified and/or FDA registered facilities. www.CenergyNutrition.com and https://www.facebook.com/CenergyNutrition
Like us on Facebook https://www.facebook.com/CenergyNutrition
About www.HempNorthAmerica.com
Hemp North America.com will provide premium grade Hemp Protein supplements to those looking for a natural and lactose free product. Consumers can count on us for bringing the latest scientific findings in the supplement world to market. Also all our products can be found for sale and purchase on all the sites we own www.HempNorthAmerica.com www.supplementstogo.com, www.worldclassnutrition.com, www.a-z-nutrition.com
About www.ChianorthAmerica.com
We will have the best value at the best price; The products which will be manufactured in state-of-the-art facilities GMP Certified and FDA Compliant, and packaged and stored in conditions of the highest standard. A few of our goals are to educate the public with current, science-based information, and provide the highest quality natural products. www.ChiaNorthAmerica.com will strive to become the site and brand of choice for health-conscious consumers. Also all our products will be able to be found for sale and purchase on all the sites we own www.ChiaNorthAmerica.com www.supplementstogo.com, www.worldclassnutrition.com, www.a-z-nutrition.com
About www.supplementstogo.com
Supplementstogo.com is one of the leading online retailers in the market today for discount supplements! Always focusing on the hottest products and what provides the best results for their customers, Supplements To Go has made a great name for themselves in the world of nutrition. To find out more about SupplementsToGo.com, please view the site www.supplementstogo.com.
About www.a-z-nutrition.com
A-Z-Nutrition.com is one of the best known e-tailers of discount nutritional supplements. Providing its customers over a decade of quality products at the best prices around, A-Z-Nutrition supports its customers with a portal that is easy to use and to the point. To find out more about them, please view their site www.a-z-nutrition.com.
About www.worldclassnutrition.com
World Class Nutrition - Founded in 1999, early in the internet age of web based super stores, World Class Nutrition is a successful nutritional supplement/fitness equipment retailer due to providing their loyal customers top level support and great prices on their favorite supplement brands.
Safe Harbor Notice This press release may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements relating to financial results and plans for future development activities, and are thus prospective. Forward-looking statements include all statements that are not statements of historical fact regarding intent, belief or current expectations of the Company, its directors or its officers. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are beyond the Company's ability to control. Actual results may differ materially from those projected in the forward-looking statements. Among the factors that could cause actual results to differ materially from those indicated in the forward-looking statements are risks and uncertainties associated with the Company's business and finances in general, including the ability to continue and manage its growth, competition, global economic conditions and other factors discussed in detail in the Company's periodic filings with the Security and Exchange Commission. The Company undertakes no obligation to update any forward-looking statements.
CONTACT INFORMATION
Contact:
Jeff Thomas
(313) 655-1669
Email: Info@cenergynutrition.com
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MusclePharm's CEO Discusses Q3 2013 Results - Earnings Call Transcript
Nov 15 2013, 21:28 | about: MSLP
MusclePharm Corp. (OTC:MSLP)
http://seekingalpha.com/article/1844472-musclepharms-ceo-discusses-q3-2013-results-earnings-call-transcript?source=email_rt_article_readmore&app=1
Q3 2013 Earnings Call
November 15, 2013, 11:00 AM ET
Executives
Robert Prag - President, Del Mar Consulting Group, Inc.
Brad Pyatt - Co-Chairman, Chief Executive Officer and President
Gary Davis - Chief Financial Officer
Richard Estalella - Chief Operating Officer
Sydney Rollock - Chief Marketing Officer
Analysts
Jack Wallace - Sidoti & Company
Philip Anderson - Pinnacle Fund
Keay Nikae - Ascendiant Capital
Nelson Obus - Wynnefield Capital
Jeff Corrado - Furey Research
Wilson Jaeggli - Southwell Partners
Peter Black - Wynnefield
Presentation
Operator
Greetings. Welcome to the MusclePharm Corporation third quarter 2013 conference call. (Operator Instructions) It is now my pleasure to introduce your host, Bob Prag, President of Del Mar Consulting Group. Thank you, Mr. Prag, you may begin.
Robert Prag
Thank you. Today's conference call may include forward-looking statements that are subject to risks and uncertainties relating to MusclePharm's future business prospects and opportunities as well as anticipated results of operations. Forward-looking statements represent only the company's estimates on the date of this conference call and are not intended to give any assurances as to the actual future results. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties.
Many factors could cause MusclePharm's actual activities or results to differ materially from the activities and results anticipated in forward-looking statements. These risk factors include those contained in MusclePharm's Annual Report on Form 10-K most recently filed with the SEC. Please note that the company assumes no obligation to update any forward-looking statements after the date of this conference call to conform with the forward-looking statements actual results or to changes in its expectations.
At this point, I am proud to introduce the CEO of MusclePharm, Brad Pyatt. Go ahead, Brad.
Brad Pyatt
Thank Bob, and hello, everybody. I am pleased with Q3. It was another very strong quarter for MusclePharm. Our results show the power of our strategy to manage the pace and the quality of our growth. Topline Q3 delivered 9% growth sequentially and 51% growth year-over-year. This puts us on pace for another record growth quarter and on pace for another record year.
We continue to demonstrate strength across our sales and distribution channels, while dramatically improving our operation an additions to our executive team. Our balance sheet continues to improve with $22.7 million shareholder equity versus a negative $9.8 million in shareholder equity in 2012.
We are excited to announce for the first time, MusclePharm will be giving a comprehensive guidance for 2014. Shareholders can expect this to take place sometime in mid-January.
My leadership team is fully in place and remains laser focused on managing the portfolio to capture the opportunities it creates. This was on full display in Q3 with the successful launch of the Arnold Schwarzenegger series that outperformed our original projections.
In addition, the most of our brands continue to expand the market and gain share domestically and internationally. We will continue to execute our aggressive growth strategy and stay focused on adding sophistication to MusclePharm with continued innovation, science, while leveraging our sales and distribution channel, which will result in sustainable growth.
We recently announced an agreement to acquire the assets of BioZone. This opportunity provides cutting-edge technology in QuSomes that will allow us to bring sophistication and innovation to the sports nutrition market with new delivery systems. Richard will elaborate on the operational opportunity that this new acquisition presents for the future of MusclePharm. I can also report we're in current and active discussions with NASDAQ with respect to potential uplifting and hope to bring this to a conclusion shortly.
I would like to now turn this over to our CFO, Gary Davis.
Gary Davis
Thank you, Brad. MusclePharm is pleased to report that in 2013 quarter-over-quarter, we have continue to strengthen our P&L and balance sheet. For the three months ended September 30, our net sales of $25.3 million, is 36.4% stronger than the same three months of 2012. For the nine months ended, our net sales of $73.4 million, is 45.2% over the first nine months of 2012.
For operation expenses, we had $12.3 million of operating expenses in the first three months and $31.8 million for the nine months ended. For the quarter ending September 30, 2013, the company had an operating loss of $4.8 million. $4.2 million of the $4.8 million was non-cash charges.
Our balance sheet continues to grow and improve, and at September 30, our total asset was $41.5 million compared to $6.8 million at December 31, 2012. Our cash position continued to strengthen with $5.7 million compared to only $10,000 at the end of 2012. We've acquired $9.6 million of inventory and our shareholders equity finished positive at $22.7 million. As Brad Pyatt mentioned, we are planning to give comprehensive guidance in 2014 in the month of January.
Now, I'll turn this over to Richard Estalella, our Chief Operating Officer.
Richard Estalella
Thanks Gary. Gross margins for the quarter came in at 29.2%. Gross margin was affected by our Assault end-of-life inventory management plan and an aggressive promo funding program with our customers to drain any remaining old inventory in the field. Absent of these two initiatives, we would have had gross margin in excess of 33%.
Significant growth from 2012 gross margin of under 22%. We've established a solid foundation to continue to grow margins in Q4 and 2014. We will have a keen focus on increasing gross margin dollars from quarter-to-quarter. You may see gross margin percent bounce around as we expand placement of all of our brands, but we will definitely hit our 2013 goal of gross margin percent at 30%.
Inventory build, we successfully transitioned from a consignment inventory model to owning $9.6 million of inventory. We accomplished this without increasing any debt, while maintaining cash balances at all times between $5 million and $7 million. We now have the safety stock required to generate best practice fill rates and support topline growth for 2014.
Some of the key highlights for the quarter include successful production to support the Costco chain-wide launch of our Combat product, successful distribution of our new Arnold Schwarzenegger line and record distribution internationally.
Next category I want to just kind of quickly chat with you about is continued focus on cost controls. Centered around headcount management, analysis of advertising and promo discount spend, which Sid will talk further in his update. This will allow us to meet our 2014, net revenue, EBITDA and earnings per share targets. We're in the midst of negotiating a line of credit with a private equity firm, that we're building a strategic relationship with. We plan to have that completed in early December.
BioZone Labs, some of the highlights of what that brings to the MusclePharm family; it speeds of our ability to launch a West Coast distribution center, which we didn't have planned until middle of next year; we will not be able to do that sooner; comes with innovative IP and technology that will allow us to incorporate into our existing products and new products in our pipeline; ability to support our expansion into the liquids and gels category; provides us the ability to further diversify our current product offerings; and add significant staff in the areas of research and development and quality control, to support our new product pipeline for 2014.
So we continue to build an infrastructure to have us well-positioned for future growth across all businesses without any constraints related to capacity or systems.
With that, I'm going to turn it over to Sid Rollock, our Chief Marketing Officer, for his update. Sid?
Sydney Rollock
Thank you very much, Richard. I am glad to be a member of the team. And like Richard, I had the opportunity to meet Brad, to my venture, and came away totally impressed with his vision and passion to match the global market opportunity with the MP brand.
My track record, over the last 20 years and passion for building iconic brand portfolio with such notable Fortune 500 companies and GlaxoSmithKline Consumer Healthcare, Campbell Soup and General Mills Inc. have positioned me to help the team expand on the tremendous growth opportunity prevented today within the nutritional supplement space.
We operate in an exciting sector that is experiencing dynamic global growth. The global demographics are moving into MusclePharm space, attracting young and mature consumers, leading active lifestyle. We believe our brands are poised to compete in the global $75 billion-plus vitamin and supplement sector. And 2013 continues to illustrate our growth strategy is working.
Total sales are on pace for year-on-year growth to exceed our $100 million guidance. The Arnold line as share from MP is gaining great trial with only two months of sale. International is on pace to work with an over 30% of our total business in just three short years and is going to be up over 85% year-on-year. And most importantly, the innovation pipeline is well-positioned for 2014 and beyond.
As Brad alluded to, at the beginning of the call, we are excited with the progress that we continue to make against our 2013 objectives. As Brad, stated at the beginning of the year, the first priority, we're going to improve our balance sheet position and we have done that. Our second priority was to bring on board an executive leadership team to transition the company to a professional organization. We have done that.
The third priority is to build operational capabilities and efficiency, to be a world class operator. We are in progress of doing that with addition of Richard and the tremendous strive that he has made with his team in a manner of just four short months. And that we will continue to deliver innovation and growth that would represent first-to-market entries within the category space. And last but not least that we will continue to demonstrate aggressive growth in the category.
In closing, I'd like to say, that MusclePharm is poised to be best in shelf, with the superior product, science, safety and efficacy, customer partners and our unique brand experiences, that connect us with our consumers.
I am really excited to share that in January of 2014, we will come back to you with our first long-term strategic plan that outlined our objectives and our strategic growth platform. We want to thank you all for joining us today and we're really excited that you are a member of the MP Nation.
Robert Prag
Thanks. Sydney. Operator, that concludes the presentation. So if you could please open up for Q&A session.
Question-and-Answer Session
Operator
(Operator Instructions) Our first question is coming from the line of Jack Wallace with Sidoti & Company.
Jack Wallace - Sidoti & Company
Question for you, the Assault, blowout here in the third quarter, heavily discounted. You talked about changing formulas on, I guess, a more regular basis than some of your competitors. How often will this happen and how often will you have an impact such as we've seen here in Q3?
Sydney Rollock
Jack, one of the things that we've implemented in just last three or four months is that a full product pipeline schedule, so that we can properly manage end of life on any transitions like this. So the transition from the old Assault to the new Assault and the next level of technology was definitely the right decision.
And as you know historically both Brad and MP in general, has always known how to get the right product out at the right time. I think the missing piece for us was understanding how much product on a category that was a large percentage of our business was sitting out there and how long it would take the transition out of it.
So now we've got a track record for that and we'll be planning further out. So the answer is we'll do it as often as it will keep us cutting edge with our products. The big difference going forward will be, we'll plan an end of life strategy that basically phases out not only our on hand in victory, but our customers on hand in victory.
And quite frankly I think that because of the fact that earlier in the year, and previous launches has not gone as effective as this one did, I think everybody went a little happier, and kind of just in case the launch got delayed, and when we launched on time and on target, I think that that left a bit more inventory up in the marketplace, and we made this strategic decision to not have this product come back to us, but rather sell it through in the marketplace. I still think that was the right thing to do, even though it may have given us a short year hit against margin, but it got a lot more product in the hands of end-users.
And again, the folks that took and bought back Assault at a lower price, many of those were first time users, and now they'll come back and buy the new product. So long-term it will pay off. In the short term, I know that a lot of folks are just pointing about it, but rest assured that we understand the end-of-life strategy, and next time we will do it much more effectively.
I'll give you a perfect example, we are in the midst right now of transitioning one of our flavors on the Combat line and that the new flavor will roll out in December. We've totally managed our inventories, and the new flavor will come out with basically a phase-in that will create none of this issue that we dealt with here. That's how we'll manage future product transitions.
But again, the secret to what we've been able to deliver in the topline growth that we delivered is not being concerned or scared about going to the next level of technology or letting somebody else beat us too. So we can't let that be a shutdown or slowdown or things like this. We just have to plan better and I think we've got the plan in place how to make sure that the one thing that we were weak on, we're never weak on again.
Jack Wallace - Sidoti & Company
And then as a follow-up there to the discounting figure. You have here another early quarter, maybe your first full quarter with Arnold and then the fitness nationwide launch in Q1. Can you talk to us little bit about what you expect to have the discounted growth revenue to be in Q1, Q2, Q3, is it going to be somewhere in that 13, 12 range or are we going to see it maybe sneak back up into the mid-teens?
Richard Estalella
So I'll start out, then I'll transfer it over to Sid, because he's been doing a great job, kind of getting the sales team and our customer base kind of align on pricing programs, but one of the things that we're real happy about is again, the way we've launched these lines, again especially with the fitness where it's a very unique line designed towards women, and also the Arnold line that has such an icon name catch to it. It really are as aligned as a commodity brand, like MP would be with pre-workout, et cetera, et cetera. So it's just a bit of competitive advantage there.
So I think that although your [ph] OE is a bit more aggressive in new placement, I think you've build a solid foundation and the excitement around on the Arnold line has allowed us to get in a lot faster and a lot more effectively than most brands would, and I think again it's starting to gain extreme momentum. I'm sure you've probably all seen that the Walgreen has just taken the line chain-wide, picking some of the products and is expanding on the line chain-wide.
So again, we're really, really accomplishing things that normally take most companies years to do. But again, I think will be very effective and it will be within our discount targets. But Sid, I don't know if you expand a little bit about, you're being head of the sales team, I know it's pretty sharp.
Sydney Rollock
Thank you for that, Richard. I think Richard elaborated on that quite well. What I will represent is that you will find our discounts coming down and we will share more with you in Q1, in January 2014, in terms of those strategic targets. But we don't anticipate those discount rates getting back to the historical levels that they have been. And we're working aggressively now to give the team, what I call meaningful targets, setting consistent pricing strategy across business channels and making sure that we promote the premium aspect of all of our products.
Operator
Our next question comes from the line of Philip Anderson with Pinnacle Fund.
Philip Anderson - Pinnacle Fund
I appreciate that disclosure about Arnold. It's about $3.6 million of sales in the first two months, which just doing the simple extrapolation, suggest it's under $22 million annualized revenue run rate. But can you give us some granularity on the plan to broaden distribution of the Schwarzenegger products next year and particularly in brick and mortar stores, what type of stores you're looking to go into, whether it's change or mom and pops, how you'd most effectively distribute and can you give us some expectations or some thoughts regarding how many doors, Arnold maybe in, say by mid-2014 or end of 2014?
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Brad Pyatt
I'll take a first crack at that, Richard. I think at this point in time, we've been focused on what our traditional specialty channel have been and also international, and we've met with great, great acceptance and we're only now starting to get into what I would call strategic talks with the some very, I'd called them strategic partners, on the brick and mortar front or the traditional FDM front.
And I think it's a little too early to disclose those type of specific numbers, but we will have I think a little bit more granularity in January, that's why we're so excited. All of these irons are in the fire, and by January, I think we'll be able to put some parameters around them, so that it can help you do what you do. And at the same time, not have us over-promised. So if you could wait until January, we'll be excited to start to reveal a little bit more of the plan on the brick and mortar front.
Philip Anderson - Pinnacle Fund
Any idea at this point, whether it's early January or late January that I will have to wait?
Sydney Rollock
Not too long, I think we're shooting for, I would say, mid-to-late January.
Brad Pyatt
So just to kind of add to what Sid said, again I think that we launched with the real sharp strategy here. We've partnered on the brick and mortar side with GNC and they've really committed to the brand. We're partnering extremely well on kind of getting that -- they've got the prominence of doors in that arena. So I think it was the right strategy.
And on the distributor side, we've launched exclusively with Europa, again the largest distributor in our space. And they've had an incredible success of getting to a very high-paced percentage of their doors, right off the bat. So we're really hitting it from all angles. And of course, the area was on the online sites. We gave exclusivity to our bodybuilding.com.
So we've really got that three of the major players in each one of those segments, very aligned strategically to launch this product successfully. So don't think that we're loosing anytime, its part of this. It's actually going extremely well. And internationally, actually we're wide open, because I think that it just demanded that and we've been very, very, very surprised of the growth and opening orders outside of the U.S. borders.
Philip Anderson - Pinnacle Fund
I would say the $3.6 million of sales in the first two months, certainly is indicative, that you're having the great reception. On other question, on some of the advertising spent with variable costs, it doesn't necessarily have a direct definable contribution to the company. How do you plan for your advertising spend and monitor it's results and try to determine, if you're achieving a satisfactory return on invested capital, the return on investment for advertising. Can you help us understand how this is being controlled and run in a methodical businesslike manner.
Brad Pyatt
Yes. We're in the early stages of I'd say putting, bringing the marketing mix analysis models into our fold. We're in the process right now of creating the right disciplines, systems and tools, so what I see as establishing the proper baseline. Once we now have the proper baselines across the MP brand portfolio, now to include Arnold as well as FitMiss, we'll be better able to start to articulate what those ROI expectations are. The company has been growing so fast across, I would call it, multiple brands within the context of the MP line, and now with the addition of two great sub-lined that what we have to do is make sure that; one, we've got the right baseline metrics in place; and then secondly, that we're appropriating the right time horizon in terms of what that payback looks like.
As you know, advertising can have an ROI in terms of a negative upfront return, but definitely have a longer-term payback and at an aggressive growth company, that's what we're looking for. But rest assured that as you can you see, our advertising tends to be the type of more effective, which is definitely more in terms of word of mouth and consumer experiences, and sharing what I call the actual results of the product.
As you know, one of the cofounder, Cory, who's got a tremendous following online, and for example, we're starting to put in place the tools and metrics to help us understand or soak the power of our social marketing scores. And the early indication are, which we'll share more in January that we compare very favorably to what I would call the giants in the industry.
So rest assured moving forward that you'll see us talk a little bit more about ROI. But keep in mind that our objective continues to be aggressive growth. We're looking for long-term payback versus short-term returns on investment.
Richard Estalella
Just to add to that again, a little bit is that, again we're always going to and especially in the year-over-years here, our advertising expense is always going to be much higher than those companies in our space. Because again, don't forget that our goal is to grow topline to get as much market share as we can.
But again, the big difference now would sit onboard, even though we've been trying to really monitor it imperially, we needed somebody with this expertise to be able to really drive the calculation of ROI on that spend. And again, it's really gone to another level just in the short period of time than it's been here and in '14 it will be incredible we'll be able to do with those dollars.
Operator
Our next question is from the line of Keay Nikae of Ascendiant Capital.
Keay Nikae - Ascendiant Capital
Can you tell us what the mix was between U.S. and o U.S. sales?
Brad Pyatt
Richard, would you like to take that?
Richard Estalella
We've been trending on an international basis. We've been trending at about 30%, again super year-over-year growth. And quite frankly the nice thing about those type of numbers is that, our Head of International Sales has really expanded into topnotch distributors and new markets that we haven't seen the annualized effect of yet, because he has been building it all year along. So we expect that number to stay that strong going forward, even though he's had a very high growth rate this year, year-over-year. So about 30% internationally and of course the remainder spent is over the domestic pieces of our business.
Keay Nikae - Ascendiant Capital
And just an accounting question, but now that you've substantially acquired all the assets of BioZone, how are you going to treat? And what's a status of the convertible promissory note and the warrants you have?
Richard Estalella
Garry, do you want to take that one?
Gary Davis
I could make around that. We had $2 million notes of which BioZone returned $1 million plus about $32,000 of interest. And then the other $1 million of our note we converted into 5 million shares of BioZone common stock. And on November 7, we began selling those 5 million shares for approximately $1.5 million. So strategically we try to bring in some people who wanted to be a part of the BioZone deal with us and looking forward to the growth that comes from there.
Keay Nikae - Ascendiant Capital
So you're still on some additional shares of BioZone?
Gary Davis
We still own the warrants.
Keay Nikae - Ascendiant Capital
And then just finally, on the OpEx, I appreciate that you broke out the non-cash portion of that, but when we think about your OpEx, in general in Q3, what part of that is one-time in nature?
Gary Davis
We had about $1.1 million of what we considered one-time non-recurring expenses, some of that varied over between legal expense. And we've been satisfying the SEC enquiry and so this is basically considered one-time. We're almost backed up with that issue.
Richard Estalella
And just to add to that also on the ongoing operational expenses. Again, as we mentioned we're really putting an infrastructure in place from an IT perspective and even a staffing perspective to be able to deal with the expected growth in 2014. So you're seeing the effect of some of that now that we'll see the leverage in the coming years.
Keay Nikae - Ascendiant Capital
And then just your other comment this morning about the audit committee's review of the past financials, and their view of no need to restate, where does this stand with the SEC?
Richard Estalella
I think we're very comfortable that we provided the SEC with everything they've requested. And again that everything that we've submitted has not pointed out any major concerns. Again, it's still ongoing, but we feel very comfortable, number one, that current year 2012 is not an issue, which really again past years, and its pre-Gary, it's pre-occur in auditors. I think that we've got a very solid process in place now. We just have to work through some of this. And Gary, I'll turn it over to you.
Gary Davis
I mean, this in SEC enquiry was really revolved around the reporting of 2010 and 2011. And as Richard said, we've been having meetings and the correspondence that we've had from the SEC to date is showing that there is nothing that will have a material impact on the company. So it's all looking good. It's going to come forward without any impact.
Operator
Our next question is from the line of Nelson Obus of Wynnefield Capital.
Nelson Obus - Wynnefield Capital
Well, two questions, one is, and we've been talking around it, but let's look ahead say nine months, and you're in a lot of channels. But can you make a couple of generalizations about what point of sale data you're going to have on a regular basis?
Brad Pyatt
As Richard alluded to, that's one of the priorities that have put in place, in terms of making sure that we are now what I call intelligent, as it relate to our consumption sales and not just our X-factor shipment sales. So we are in the process now. I'll say we put out -- we're in the process of putting out RFP for some of the big data providers folks like Nielsen as well as Euromonitor, have a meeting next week, with one of those providers.
And just to let you know that's the type of sophistication we'll be looking to implement in 2014, which again will help us to get to better ROI metrics using sophisticated marketing mix analysis model. So we're really excited. And I hope that answers your questions. But I would say that by mid-year 2014, it's my anticipation and the team's anticipation, when I say my, the collective team's anticipation, that we'll have that data provider on board and partnering with us to maximize our sales as well as understand our consumer base much more smartly.
Nelson Obus - Wynnefield Capital
And let me play skeptical for a minute, because you started the call by -- actually, let me get it clear. I'm not exactly clear what you said. But you said in January you'd give us a strategic update, right. Now, I'm not sure whether that update will involve anytime the financial projections. I mean if that doesn't, than that's the answer, but if you do plan to give us some kind of financial sets of where you think the company can go, can you do that without having that point of sale IT network in place?
Brad Pyatt
Let me take a crack at that first, guys. It's a two part question. First of all, strategic guidance usually involves financial guidance, right. So let's take that that's the new point. Secondly, as it relates to being able to project, the company has done a brilliant job of projecting to date without some of that data.
As we now expand into the FDM channel, which is heavily monitored using those data providers. We now have to align our systems to be able to look at the consumption in those channels. We do a great job in shifting and we know on our reorder patterns, how things are moving. But we want to make sure that we also understand what the consumption flows look like relative to FDM, which is outside, which is a new channel that we are now getting into.
So please understand that we'll continue to do a great job of forecasting our business. But what we're dong is adding a level or layer of sophistication that now looks a consumption data that monitors the new channel i.e., the Costcos that we're going into in a much more, how would we say, consistent and detailed basis. And many of the analysts that follow us will also have access to that data.
Nelson Obus - Wynnefield Capital
Let me just turn to BioZone for a second here. My original thinking was that you wanted some assistance from them to create the kind of medical and pharmacological backup that would add to the scientific and physiological credibility of the product, which made a fair amount of sense. Now you've bought the whole thing, so before I was thinking, well BioZone would be a big product or would be a big customer of yours and you would work with them on that, but they would have third-party customers also. Now I'm a little bit confused. I mean is BioZone going to be proprietary or you're going to have another business there that does the same work for other entities, how that's going to play out?
Sydney Rollock
So you're exactly right on what the primary goal is with BioZone. It's leveraging the technology, patented technology that they have across our product base. And again, leveraging their R&D staff and their quality control staff, really strengthens the team we were building internally already. So both of those are big opportunities for us, that now we're much stronger in, once this transaction and when this transaction is completed.
And by the way, we've built a pretty solid network right now of contract manufacturing partners that can handle powders, capsules, tablets for us. Our weakness has been in the liquids and gels. And now we've got back the ability to really expand and diversify our line more, so that's a very important piece to us. Now with that said, they have an existing contract manufacturing business. It's a business that we plan to embrace and it helps diversify and cover overhead. So I don't see anything changing there, and if anything, maybe we can help expand that.
Nelson Obus - Wynnefield Capital
So actually you could develop that into a separate cash, call it, segment if depending how things go.
Sydney Rollock
Exactly right.
Gary Davis
One more thing to that point, investing into BioZone also opens up opportunities for us to be distributing from the West Coast rather than just from Tennessee. Our main facility right now for distribution is in Franklin, Tennessee. But we're looking at this as new avenue for distribution of the West Coast.
Richard Estalella
And again, from a quality perspective, we've really started to set the bar in our industry of the free testing we do of our products before we launch those products into the field and now we've got in-house laboratories that can do that, even further than what we're able to do at our research and development center in Denver, so again it allows us to manage a lot more of this in-house than currently what we've been doing what we outsource a lot of this, and it puts us in control of more of the process.
Operator
Our next question is from the line of Jeff Corrado of Furey Research.
Jeff Corrado - Furey Research
I just wanted to congratulate you guys beforehand on what looks like a fantastic start to your next growth phase of the company and I wanted to acknowledge Brad, I mean despite the growing pains of the early start of the company you have seem to surround yourself with an amazing support cash just listening to the call today. I just have two quick questions. The first one has to do with Arnold versus the main product line. Obviously shareholders are concerned whenever you have a new product of cannibalization, I guess I just wanted to get a brief description of how you differentiate between the two products and how you sort of plan to target different markets between those, and whether you think, whether or not there is any cannibalization that can incur?
Sydney Rollock
I'll take the first crack at it from what I call a new product perspective, and I know Richard will probably have a view as well, but my first three weeks here, we've now partnered with a couple of our customers to help us start to get behind the data in a way that they haven't even looked at the data before, and very, very early on. And I don't want us to take this beyond this point, but in the spirit of just sharing and helping you understand how we're looking at the business.
Arnold is looking to be nicely incremental to not only our brand, but to the category. So when we get together again in January, we'll be able to elaborate a little bit more, because keep in mind we just launched that brand and what we're starting to learn now is the interaction between the master brand, that being MusclePharm. So we're very, very pleased, but I'd like to term this phase, the trial phase.
And what's going to be equally important, as you know, will be around the repeat. And that's what we're trying to get a good handle on, whereby we can really start to talk about, what I call the sustainability of the Arnold business and how that will be positioned against the base business of MusclePharm. So bear with us for the next couple of months as we continue to gather the data to allow us to have, I'll call it, an intelligent discussion around that, but know that early on it looks to be incremental not only to MusclePharm, but also to the category. Richard, do you want to add anything to that.
Richard Estalella
I think that the key addition would be Arnold line, as it expands to a much larger demographic, both young and old. And really I think that the MP brand has had a more different demographic, so I think we've opened it up to a lot more potential buyers, number one. Number two, in a lot of our categories like our pre-workout Assault brand, it's not unusual for a heavy user to want to transition from one product to another, just to kind of keep it fresh.
And it some times even more than just within flavors, they go from one to the other. So the fact that now we can take a customer from Assault to Pump and back, really it prevents cannibalization, where today we maybe sharing four or five of the order cycles with another brand. Better to keep it in-house with us.
So I think that's kind of something that I know Sid's looking at analyzing. And we've also launched some products that we didn't have in our assortment before, that are now under the Arnold brand that I think will do very well under that planned. Although, they would have under the MP brand, I think it just carries an iconic symbol to get it off the ground faster.
Jeff Corrado - Furey Research
Perhaps I'll follow-up again on that and see how things are going in January.
Brad Pyatt
Now, we're just going to say, we look forward to your question on that.
Jeff Corrado - Furey Research
I guess, I have one more, and then just a really quick one that you can answer really quick. Any timeline just for when we can expect, I'd say, the allowances to go back to what seem to be the average earlier on in the year and then it get some gross margin expansion here?
Brad Pyatt
I think we alluded to that a little bit earlier on the call. And as Richard alluded to, you saw the spike reoccur because of the end-of-life discounting associated with our older sole product and a relaunch with the new product, which is off to a fabulous start, for it was the right thing to do. But as I said earlier, I think our goal is to get that back in line with where we were and to hopefully do better, and again we'll elaborate on that a little bit more in January, just for consistency.
Richard Estalella
And just to add to that, also keep in mind that you've seen what the company has done in its first few years, and we really thought most of the trends and we thought most of the typical processes, I think that's what makes us special. And the fact that we're very agile in seizing the moment, I think is a very key strength that we don't want to walk away from to hit a discount percent.
So what I mean by that and going back to Nelson's earlier question, some of the internal and the trends analysis that we're doing is the number of doors that we're adding on a monthly basis, and the penetration of each individual door that were already hit and how we're improving that. As we do that, we need to go after a very, very large account or a new segment of doors or something that really gets us to the next level longer-term, we may have to take a short-term investment against that.
Again, if you're talking about a few months that then turns into some incredible returns, every time that comes up we're going to do it every single time we can. So I guess what I'm trying to say is that you may see some things moving around, but it's not because we're not controlling what we're doing, because strategically we're making the right decisions long-term for the company.
Jeff Corrado - Furey Research
And really quick, last time, I'm in Boston, I was under the understanding, you've already started airing the Kaepernick commercials on the West Coast. I was wondering, if you could just give me a quick timeline about, when that might go nation-wide? And whether or not we can expect to see Arnold at any point show up on the television screen?
Brad Pyatt
All I'll is you can wait until January. I don't want to tip or add on anything. We're actually giving some early reads on Kaepernick. Depending on those read, we'll dictate how we extrapolate that nationally and/or continue advance it regionally. But again, those are the kind of initiatives we'll be able to talk to a little bit more in detail come January.
Operator
Our next question is from the line of Wilson Jaeggli of Southwell Partners.
Wilson Jaeggli - Southwell Partners
Couple of questions here. On the BioZone, to make sure I understand what you said, you basically sold off, either converted the notes into cash or common, and the common that you owned at one time you have sold in the marketplace and you only own warrants, is that correct?
Brad Pyatt
That's correct.
Wilson Jaeggli - Southwell Partners
And tell me the terms of the warrants and how much do we own?
Brad Pyatt
Richard, you know how the warrants are.
Richard Estalella
Again, I don't have the exact number. I think it's in the 5 million share range at a specific strike price. Again I don't know exactly. Again, we've transitioned this from a short-term investment into a much longer-term investment. So really, as you can see what we've already done would be original loan and stock has been extremely accretive for the company.
Wilson Jaeggli - Southwell Partners
Can you give us an estimate of what the conversion price is?
Gary Davis
I think it's $0.20. The reason where somewhat has been on this is because we have not yet finished all of the terms for the purchase agreement.
Brad Pyatt
We're still in negotiation.
Gary Davis
I think until all of that finalizes, it's kind of difficult to answer all of it.
Wilson Jaeggli - Southwell Partners
One other question on the BioZone, and then I'll go somewhere else here with some other questions. I understood you had to sell the stock basically 1 million shares for $1.5 million. That means you sold the stock at $1.5 for above the current price. Can you explain that transaction?
Richard Estalella
I think there was an error in that calculation. It was actually 5 million shares for $1.5 million.
Wilson Jaeggli - Southwell Partners
You sold 5 million shares for $1.5 million?
Gary Davis
And we are amending the 10-Q this morning. That was a typographical error, when we send in to enter.
Wilson Jaeggli - Southwell Partners
Then moving on from BioZone and here, it looks like that we've gotten this SEC situation behind us and the report on the audit committee. First of all, did your auditors agree with the conclusion of the audit committee?
Gary Davis
Yes, they did.
Wilson Jaeggli - Southwell Partners
And who are your auditors?
Gary Davis
EKS&H from Denver, Colorado.
Wilson Jaeggli - Southwell Partners
Say that again please?
Gary Davis
EKS&H from Denver, Colorado.
Wilson Jaeggli - Southwell Partners
Say that again, please?
Gary Davis
EKS&H from Denver, Colorado.
Wilson Jaeggli - Southwell Partners
Another question in here on Combat being stocked in here at Costco. Is your initial stocking order complete? Are you completely inventoried properly at the Costco stores now?
Sydney Rollock
That's correct. In the early weeks of October, we distributed to all their distribution centers, and may in turn distributed to all of their stores. It's now selling. It will be starting its third week as we come forward here, fully in stock everywhere. I think Costco is very happy with the weekly sales. Based on their original forecasting fact, we've actually seen an increase in our forecast going into Q1. So I think so far it's going extremely well.
Wilson Jaeggli - Southwell Partners
Have you actually had restocking orders here?
Sydney Rollock
So we've done select stores, select distribution centers, as they're kind of putting some of it in their pipeline. But again, our commitment to them is that it's a very fast turnaround just in time. And I think they're very happy with how we're executing. So again, I guess the big message is they are not stockpiling a lot of product. They rely on us to replenish it very quickly. And we're fully capable of doing that.
Wilson Jaeggli - Southwell Partners
Moving on to another major retailer that you've had success here, Walgreens. I assume, the Walgreen initial stocking order will be done here in the fourth quarter?
Sydney Rollock
It will actually probably be either late fourth quarter or early first quarter. It all depends on the timing of their set. So we're prepared to do it either way. It's really going to be driven by when they are able to set it in their stores.
Wilson Jaeggli - Southwell Partners
Could you give us a current share count? You gave us an average share count, but share counts been increasing substantial, as you brought on new executives and the agreement with Arnold, who is now the largest shareholder. So first of all, what is your current total share count outstanding all-in-all diluted?
Gary Davis
We have 8,865,990 in open shares and right at about 10.4 million in the fully diluted position.
Wilson Jaeggli - Southwell Partners
10.4 million, including fully dilution all exercise warrants or whatever?
Gary Davis
Correct.
Wilson Jaeggli - Southwell Partners
And let me ask you, with your compensation program going forward, which you're using share count in here. What would share count look like here say toward the yearend or have we reached a stabilization in share count currently?
Brad Pyatt
This is an interesting question, because we're a growing company and we believe that there'll probably would be more share issuances in the future. We're not exactly sure how many. So I think it's understood that a growing company will have more issuance as they continue to grow. We know that we'll probably have to have more for the executive team and certain directors.
Wilson Jaeggli - Southwell Partners
What are you contractually obligated to issue new shares in the future? How do you stand currently?
Richard Estalella
Contractually, we're not. This will be for as a retention tool and something to really, really drive the efforts that it takes to take a company, where we are today to where we want to be tomorrow. So contractually there isn't anything else. There is going to be strategic, and I know that Brad has said that the next time that we do an RSA grant, it's not going to be internally, its going to be through a proxy. And we want all of you to come in and agree with what we're doing and support our game plan. So that's how you'll see future issuances when it comes to anything that we're doing internally.
Gary Davis
One more thing in answer to your question, you asked about the number of warrants outstanding, while that all of the terms we have completed, there is a $10 million share warrant and the strike price is $0.40.
Operator
Our next question is a follow-up from Jack Wallace from Sidoti & Company.
Jack Wallace - Sidoti & Company
Quick one, with the stocks and comp amortization charge in the third quarter here, what can we expect as a normalized go-forward on a quarterly basis?
Brad Pyatt
Gary, do you want to take that one?
Gary Davis
Can you repeat the question again please?
Jack Wallace - Sidoti & Company
With the share grants for both Arnold and management here, what is the normalized quarterly rate for the stock amortization that you saw here as part of the non-cash charges in the quarter?
Gary Davis
In the third quarter the amortization was $2.36 million.
Jack Wallace - Sidoti & Company
And is that going to be the rate going forward on a quarterly basis, right. I assume that this x amount amortized over was three years or so?
Gary Davis
Three years. Arnold Schwarzenegger is from 2013 to 2016, the executives RSU is until 2014 and the RSA's are until December 2015. So right now the amortization run rate is about $2.39 million. So without adding anymore shares to that, that would be expiring through 2014, 2015 and 2016.
Brad Pyatt
And Jack, just to kind of tell you what the strategy is, and again, we've all worked very closely as a team, is for that number to remain constant and an additional RSUs or anything else we do to kind of time in as previous warrants are fully amortized, and of course with our topline growth that number will leverage down. So we'll be able to accomplish exactly the same thing that we're trying to do and hopefully have a lot of leverage from topline growth.
Operator
Our next question is a follow-up from the line of Philip Anderson with Pinnacle.
Philip Anderson - Pinnacle
Your answer to my earlier question regarding advertising and focus on growing topline, kind of sparked my little grey cells from the early morning lethargy. I recall that some doing work on the industry before we invested, I've come across four companies that had been acquired in the three years or so and they have a few things in common, there is optimum nutrition, PES nutrition, shift nutrition and max nutrition.
Now, in addition to having nutrition in the name of all four companies, they all required for 3.5 times enterprise value to revenue. And based upon the current enterprise value of MusclePharm, looking at Sidoti's estimate of $158 million for next year, MusclePharm is trading for about 0.5 times or at one-seventh of the [ph] ticket valuations of those companies and their revenues averaged to $165 million, at the time that they required or approximately what MusclePharm is expected to do next year according to Sidoti.
Now, we go to the setup, the company appears to be massively undervalued and now that the SEC issue is almost entirely behind the company, which presumably clears the way for an uplift in not too distant future, what is the company's management intentions to create broader awareness on Wall Street of the quality of this business here and the valuations going forward?
Richard Estalella
Well, I think it starts us, with our ability to again give you guidance next year on what we're going to do, beyond just topline and then executing to that standard. And you're exactly right, you hit it on the head, we're extremely undervalued. We all know it. It's not indicative of what we're making happen at the marketplace, but what we're putting into this business from a sweat equity standpoint. So our goal is to make sure that in 2014,we have a much clearer picture of where we're heading and hopefully you can all help us to have everybody else recognize that.
Gary Davis
The only thing I would add to what Richard said is we just got to continue to demonstrate that we can now deliver quality growth which will drive both the topline and the bottomline and that will get the story out real quick.
Operator
Our next question is a follow-up from the line of Keay Nikae of Ascendiant Capital.
Keay Nikae - Ascendiant Capital
Really for Richard, but any of you, Richard, know that you've done there about six months, I'm sure you've seen what the low hanging fruit is. There is a possible improvements in the supply chain, but in terms of longer-term initiatives that you might be implementing soon, can you highlight what you're focused on?
Richard Estalella
Again expanding distribution domestically, which will be self-funding from a freight savings and time to market standpoint is something that we want to do next year. Beyond that, we would like to expand distribution capabilities outside of the U.S. in key markets, so that's something that we'll be looking at over the next 12 to 24 months.
And then of course, the largest portion that what we're doing is, it's making sure that we continue to expand our product base and continue to add categories that are accretive to our overall offering versus again sharing the pie of the same type of product line. So those are the key things that we're focused on. And then again, as we can grow that topline, then I'll turn it over to Sid, I mean the type of things that he can do and still experience leveraged are pretty significant.
Sydney Rollock
I think Richard hit on all the key strategic platforms, but again in January we'll outline those things, I think in my four, quarter-three-and-a-half short weeks of doing a deep dive. As I said before, I think the company is well poised to capture the global demographic growth within this sector, and to compete on what I consider a massive sector, which is the vitamin and the supplement category, which is measured anywhere at least to be $75 billion worldwide and we're just approaching $100 million. So we're very encouraged across those strategic platforms that Richard alluded too and we'll be excited to comeback in January and lay those out in a little bit more detail.
Operator
Our next question comes in line as follow-up of Nelson Obus of Wynnefield.
Peter Black - Wynnefield
This is actually Peter Black. I just wanted to clarify one gentlemen's comment that, I think he said $10 million warrant outstanding with a exercise price of $0.40. Is that true, because I'm just thinking that then that would take your diluted share count to about 18 million shares, is that the right number?
Gary Davis
No, I think here you're coming back with the comment on the BioZone warrants.
Peter Black - Wynnefield
Right.
Sydney Rollock
That's not our warrants, that's BioZone warrants, that was the remainder of the note that we took for $2 million. So they bought back their note. They it's $1 million, plus 32,000 of interest and then the other $1 million was converted to 5 million shares of BioZone common stock, which we turned around and sold for $1.5 million. The remains are $10 million BioZone warrants from the note with a strike price of $0.40. The remainder of the transaction is still being worked out in the details here, so that we can finish up the purchased agreement.
Operator
Ladies and gentlemen, we've reached the end of our question-and-answer session for today. I will turn the floor back to management for closing comments.
Brad Pyatt
Guys, thank you very much for all your comments. And I hope we provided you the valid responses that you need. If by any chance there is anything else, we've emptied the queue on questions, but if there is anything else that comes up, you know how to reach us through Bob or directly. We'd be happy to continue to answer the question. So this is a partnership that we want to continue to develop and grow, so we want to make sure that we share everything we can with you.
Operator
This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
MSLP
Smart man. Too bad there aren't more like you. Could you please recruit some of your flipper friends, educate them, and put some sense in them so they stop killing every run by nickel and diming this thing for a measly few hundred bucks in between ticks?:)...
FITX
Again, yes, as you know my goal is very long term, not even close to Jan. However, doesn't mean I don't like to hear continued progress reports within each update we get, as we consistently do. I check in here and there, I don't care about minute to minute or even month month movements of share value. There are much better things to do with my time and life is much more enjoyable that way. Those incremental positive company moves are why I remain long term. To each his own my friend. Glad you guys enjoy your strategies too. It's all good, we're all friends here man. My feeling is that this is a stock everyone will continue to do well with if played correctly, whether short term, or for me and many longs who don't waste time in pissing matches here. Continued good luck to ya bro.
MSLP
Exactly right. Where are you confused?
MSLP
Enjoy it before the tap runs dry, because no doubt it will.
MSLP
Yeah, that party will be ending earlier than expected. Great conference call today! Looking forward to that mid-January report...
MSLP
So, that must mean another consecutive green day, which happens with all your doom and gloom predictions. Keep the predictions coming...and keep trying to get in as low as possible by scaring the rookies:)...
FITX
MusclePharm Third Quarter Gross Sales Increased 51% to a Record $31.1 Million
MusclePharm Third Quarter Gross Sales Increased 51% to a Record $31.1 Million
DENVER, CO--(Marketwired - Nov 14, 2013) - MusclePharm Corporation (OTCQB: MSLP) (the "Company", or "MusclePharm"), a leading international, award-winning sports nutrition company, announced today its financial results for the third quarter ended September 30, 2013 ("Q3 2013").
For Q3 2013, the Company reported record gross sales prior to accounting for discounts and sales allowances of $31,080,225, an increase of 51% as compared to $20,627,691 for the third quarter of 2012 ("Q3 2012"). Q3 2013 gross sales grew sequentially by 9% as compared to Q2 2013. For Q3 2013, the Company reported net sales of $25,343,968, an increase of 36% as compared to $18,573,726 for Q3 2012. Discounts and sales allowances in Q3 2013 increased to approximately $5.7 million, or 18% of gross sales as compared to approximately $2.1 million, or 10% of gross sales in Q3 2012. The increase in discounts and sales allowances was largely attributable to the impact of an aggressive campaign to close-out inventory of the Company's Assault™ pre-work product in advance of the launch of its new Assault™ product formulation as well as promotional discounts on opening orders for the Company's recently launched Arnold Schwarzenegger Series™ as well as promotional discounts related to the Company's activities at the 2013 Olympia Fitness and Performance show.
For Q3 2013, the Company recorded a loss from operations of ($4,872,780) as compared to a loss from operations of ($3,810,813) in Q3 2012. Included in the Q3 2103 expenses was $4,241,339 million in non-cash expenses including non-cash, stock-based compensation expenses of $2,036,301 associated with the amortization of both certain employee RSUs and RSA agreements and the Company's endorsement licensing and co-branding agreement with Arnold Schwarzenegger.
Commenting on the results, Brad Pyatt, MusclePharm's Founder & CEO, stated, "We continue to add important building blocks in order to achieve our strategic mission of becoming one of the world's foremost sports nutrition companies. Highlighted by our recent agreements with Arnold Schwarzenegger for a new line of branded products; with Costco, Walgreens, GNC and Europa for new sales and distribution channels, and with the addition of marketing veteran Sydney Rollock as CMO; I believe we are extremely well positioned to continue growing MusclePharm and our line of branded sports nutrition products."
Recent Company highlights include:
In September, the Company announced a partnership with Europa Sports Products, the nation's largest distributor of nutritional supplements, sports drinks and accessories, to exclusively distribute MusclePharm's new Arnold Schwarzenegger Series™ across North America. The new product line is a result of a first-of-its-kind partnership with the Mr. Universe, Mr. World and Mr. Olympia title holder, actor, entrepreneur and former Governor of California, Arnold Schwarzenegger. The product line launched both domestically and internationally at health and nutrition stores, including GNC stores, as well as online retailers in late September 2013.
In October, the Company announced it officially began shipping its Combat Protein Powder® to all 430 Costco Wholesale U.S. locations This new distribution channel expands MusclePharm's reach beyond specialty health, nutrition and sports stores and online retailers to mass consumer channels. Costco will begin rolling out Combat® in its international locations in the later part of 2014 and early 2015.
In October, the Company announced it received seven Bodybuilding.com Supplement Awards. The Awards recognize superior products and brands in the fitness and supplement industry. Nominations are based on sales among the 9,900+ products carried by the site. In the past four years, MusclePharm has won 14 Bodybuilding.com Awards, including 2012 Brand of the Year.
In October, the Company named former GlaxoSmithKline® and Campbell's® Soup executive, Sydney Rollock, as its Chief Marketing Officer. Rollock has over 20 years of experience in marketing and management within the Pharma, Pharma OTC, Health & Wellness and Nutritional Supplements categories.
In November, the Company announced an agreement with Walgreens to distribute FitMiss™, the Company's innovative brand of supplements formulated specifically for women. FitMiss Delight™ will be available nationwide in all 7,000 Walgreens stores beginning January 2014. FitMiss Burn™, FitMiss Tone™ and Ready-to-Drink FitMiss Delight™ will be available at Walgreens starting June 2014.
In November, the Company announced it had signed a definitive asset purchase agreement with BioZone Pharmaceuticals, Inc. ("BioZone") to acquire substantially all of the assets of BioZone and its subsidiaries, including BioZone's QuSomes® technology as well as its manufacturing facility in Richmond, California. The closing of the transaction is subject to the satisfaction of various conditions.
For Q3 2013, gross profit margin expanded to approximately 29% of net sales as compared to a gross profit margin of 22% of net sales in Q3 2012. The gross profit margin decreased sequentially from approximately 31% in Q2 2013 primarily due to the impact of an aggressive campaign to close-out inventory of the Company's Assault™ pre-work product in advance of the launch of its new Assault™ product formulation.
For Q3 2013, operating expenses increased to approximately $12.3 million, or 48% of net sales as compared to approximately $7.9 million, or 42% of net sales in Q3 2012. The increase in operating expenses percentage of net sales was in part due to the non-cash expenses related to the amortization of stock compensation expense of approximately $2 million as well as an increase in salary and wage expenses and advertising expenses.
For Q3 2013, the Company recorded other income of approximately $927,000 as compared to other income of ($2.3 million) in Q3 2012. Q3 2013 other income included a positive change in the fair value of derivatives liabilities associated with the Series D Preferred Shares issued in February 2013 of $305,421 as well as a gain in marketable securities of $444,059. Q3 2012 other income included a positive change in fair value of derivative liabilities of $4,403,875 as well as interest expense of $3,265,053 and a loss on settlement of accounts payable and debt of $1,510,613.
Income available to common stockholders for Q3 2013 was ($3,946,000) or ($0.47) per diluted share as compared to income available to common stockholders of ($6,074,000) or ($3.21) per diluted share in Q3 2012. The weighted average number of fully diluted shares outstanding for Q3 2013 was 8,475,084.
At the end of Q3 2013, the Company had approximately $5.7 million of cash and cash equivalents, approximately $9.6 million of inventory, approximately $34.4 million in current assets, and no long-term debt. Shareholders' equity at September 30, 2013 increased to $22.7 million as compared to ($9.8 million) at December 31, 2012. As of November 14, 2013, there were 8,865,990 shares of common stock outstanding and 144,000 shares of Series D Convertible Preferred stock outstanding which are convertible into a total of 288,000 shares of common stock.
Management currently intends to release in January comprehensive financial guidance for the full 2014 year.
MusclePharm management will discuss its Q3 2013 results during a conference call to be broadcast live over the Internet Friday, November 15th at 11:00 am EST.
Conference call particulars are as follows:
Date - Friday, November 15, 2013
Time - 11 am EST / 8:00 am PST
Dial in number - (877) 407-9126 or (201) 493-6751 for international callers
Both the live Internet broadcast and replay can be accessed at:
http://musclepharm.equisolvewebcast.com/q3-2013
Management will take a limited number of questions from analysts and institutional investors following the presentation.
ABOUT MUSCLEPHARM CORPORATION
MusclePharm® is a leading international, award-winning sports nutrition company offering vitamins and nutritional supplements which are available in more than 110 countries and available in 15,000+ U.S. retail outlets, including Costco, Dick's Sporting Goods, 24 Hour Fitness, Bally's, GNC, Vitamin Shoppe and Vitamin World. The company's brands are MusclePharm®, Arnold Schwarzenegger Series™, and FitMiss™. The comprehensive lines of clinically-proven, safe and effective nutritional supplements are developed through a six-stage research process that utilizes the expertise of leading nutritional scientists, doctors and universities. For more information, visit www.musclepharmcorp.com. Follow the company at http://www.facebook.com/MusclePharm and www.Twitter.com/MusclePharm.
MusclePharm Investor Contact:
The Del Mar Consulting Group, Inc.
Robert B. Prag
President
Telephone: 858-794-9500
Email: Email Contact
Alex Partners, LLC
Scott Wilfong
President
Telephone: 425-242-0891
Email: Email Contact
MSLP
You know I love ya brotha, ole' pal, even if I disagree with your trading religion and philosophy. Yes, many trading opportunities may have been lost in the way you look at it, but to me, the biggest loss would be the amount that could have been made but sold off way too prematurely at much lower cost. I just prefer to not risk missing that final rocket blast up. I am confident it will happen, but I'm in no hurry to get there, as you've seen since 2011:)...
FITX
Great thought, I like it. Maybe those store purchases in Canada have been part of this long term medicinal marijuana plan from the beginning. I think most posters here have severely underestimated Bill's vision, strategy, dedication, and competence in what he is structuring together...
FITX
WOW! Great find on the article. These guys are moving fast!
FITX
No doubt it will happen. These traders flipping back and forth between a few ticks for small profit every day will be caught with their pants down, and hand in the cookie jar simultaneously one of these days. They won't be able to get back in anywhere close to where they sold for their small profit and the teeth gnashing will ensue. Meanwhile, I'll be holding my shares for well into the pennies and may consider selling a small fraction of those shares to them at that point...from the beach.
FITX
You know it. They're easy to spot, all hopped up with "to the moon" predictions one day and the next day preaching of the coming apocalypse and crash of the stock. At least for us longs it provides great entertainment while we save our seat for the VIP room in the long run, and they're giving up their spot to sit in the cafeteria eating some government cheese with the $1 profit they flipped a couple ticks for...
FITX
You said that yesterday and we closed green. Maybe if you keep saying it as you try to scare the rookies into selling their shares to you, we'll keep ending up green. Let's go with that.
FITX