Digital Shelf Space Corp.
TSX VENTURE : DSS
OTCQX : DTSRF

Digital Shelf Space Corp.

November 29, 2011 08:30 ET

Digital Shelf Space Significantly Increases Revenues in Q3

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 29, 2011) - Digital Shelf Space Corp. (TSX VENTURE:DSS)(OTCQX:DTSRF) (the "Company" or "DSS") announces unaudited financial results for the nine months ended September 30, 2011.

Highlights

  • Steady revenue growth during the nine months ending September 30, 2011 results in total revenues to date in excess of $1.8 million dollars.
  • Revenues for the third quarter ending September 30, 2011 were $669,533, a 15% increase over the previous quarter and a 19% increase over the first quarter of 2011.
  • The growth this quarter is very encouraging in what is traditionally the slowest season for fitness products of this nature.
  • Retail expansion in Canada and the US continued this quarter with a number of large retailers being added, including but not limited to, Canadian Tire, Zellers, National Sports, Sport Chek, Sports Experts, Academy Sports and Outdoors, and The Sports Authority.

Revenue

The total revenue for the nine months of $1,813,611 (October 31, 2010 - $6,557) continued to be driven primarily by the Company's new product GSP RUSHFIT, an 8-week home-based DVD workout program starring Mixed Martial Arts ("MMA") welterweight world champion Georges St-Pierre. In addition to the product sales directly through the GSP RUSHFIT website (www.gsprushfit.com), wholesale revenues grew by 26% this quarter alone, when compared to total wholesale revenues for the previous six months, through the Company's partnership with Northern Response (International) Ltd. ("Northern"). Distribution was increased to include but not limited to Zellers, Sport Chek, National Sports, Sports Experts and Canadian Tire in Canada and in the US, The Sports Authority - the largest retailer in the American sporting goods channel - as well as Academy Sports and Outdoors. Plans for international expansion continue to move forward and the Company anticipates new markets to be opened up starting next quarter.

Mr. Jeffrey Sharpe, CEO and President of DSS stated, "We are very pleased with the financial results for our third quarter and for the 9 month period ending September 30, 2011. For us to increase our revenue in the third quarter by 15% over the second quarter and 19% over the first quarter is a very positive sign that GSP RUSHFIT is gaining significant traction in the retail market place. Typically revenues for health and fitness products experience seasonal trends with the first quarter of the calendar year most often generating the largest proportion of annual sales. Retail sell through of GSP RUSHFIT has happened very quickly and is now for sale in over 4000 stores across Canada, as well as is for sale in the US with strategic sporting goods retailers. We look forward to expanding our distribution channels internationally and extending our marketing and advertising reach throughout the balance of 2011." GSP RUSHFIT was launched on December 10, 2010 and has quickly established itself as a premium brand in the lucrative home fitness market.

Expenses

During the nine month period ending September 30, 2011, operating expenses increased to $2,259,902 (October 31, 2010 - $1,029,161). Contributing factors to this increase of $1,230,711 were those directly related to the increased revenue generated in this quarter by the sales of the GSP RUSHFIT program and expenses of $415,284 related to the publicly traded status of the Company for which there were no comparative expenses in 2010.

Net Loss

Although expenses more than doubled on a period to period comparison, the loss for the nine months ended September 30, 2011 was $416,025, a decrease of $606,612 from the net loss of $1,022,637 for nine months ended October 31, 2010. The loss of $70,441 this quarter is a decrease of $159,587, down from a loss in the second quarter of $230,028.

Selected Financial Highlights
Selected Period Information
Nine months Nine months
ended ended
Sept. 30, 2011 Oct. 31, 2010
(Unaudited) (Unaudited)
Net loss $ (416,025) $ (1,022,637)
Weighted average number of shares outstanding 46,539,863 18,946,694
Net loss per share (1) $ (0.009) $ (0.054)
Total assets $ 2,212,567 $ 727,534
Total liabilities $ 252,129 $ 1,667,638
Shareholders equity $ 1,960,438 $ (940,104)
(1) Basic and fully diluted net loss per share are the same.

About Digital Shelf Space Corp.

Digital Shelf Space is an independent producer of home entertainment content and online delivery technology provider to digital retailers, content owners and aggregators. Digital Shelf Space's proprietary technology platform has been custom built to deliver home entertainment content directly to consumers. The platform blends e-commerce functionality and paid DVD, digital download and streaming video delivery. For more information please visit www.digitalshelfspace.com and to view our project with Georges St-Pierre, please visit www.gsprushfit.com.

ON BEHALF OF THE BOARD

Jeffrey Sharpe, President & CEO

Forward-Looking Statements

This news release contains "forward-looking information" within the meaning of the Canadian securities laws. Forward-looking information is generally identifiable by use of the words "believes", "may", "plans", "will", "anticipates", "intends", "budgets", "could", "estimates", "expects", "forecasts", "projects" and similar expressions, and the negative of such expressions. Forward-looking information in this news release include statements about expected revenue as a result of the addition of new outlets, the Company entering into additional markets, the expansion of existing advertising strategies and the implementation of new marketing methods; the expansion of the GSP RUSHFIT brand and distribution channels; the impact and profitability of digital delivery of the Company's products; increased seasonal sales during the fourth quarter; penetration of new markets, both domestic and international, as well as expanded advertising strategies and new marketing methods (including television and internet); the development and sale of complementary GSP RISHFIT product lines; the launch of a new fitness-based DVD series or product line starring a celebrity or athlete; the Company's strategy, future operations, prospects and plans of management; the Company's expectations with respect to existing and future agreements with third parties; estimates of the length of time the Company's business will be funded by anticipated financial resources; the scope of distribution of GSP RUSHFIT, plans for international expansion in the next quarter and the quantum of growth of Canadian sales as a result of the Northern Response partnership, and anticipated results and benefits of consumer use of celebrity fitness products.

In connection with the forward-looking information contained in this news release, the Company has made numerous assumptions, regarding, among other things, the timing and quantum of revenue generated through sales of the Company's products; revenues will continue at current levels and increase; sales will increase during seasonal periods in the fourth quarter; the sufficiency of budgeted expenditures in carrying out planned activities; the Company's ability to protect its intellectual property rights and not to infringe on the intellectual property rights of others; the availability and cost of labour and services; expected growth of sales as a result of the Northern Response Partnership and consumer demand ;and expected results from the use of celebrity fitness products. While the Company considers these assumptions to be reasonable, these assumptions are inherently subject to significant uncertainties and contingencies.

Additionally, there are known and unknown risk factors which could cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information contained herein. Known risk factors include, among others: the Company may not be able to sustain or increase revenues achieved during the current reporting period; the Company's products may not achieve the brand recognition and increased distribution as currently anticipated; the digital delivery of the Company's products may not produce additional revenue in the anticipated amounts, or at all; the Company may never expand its distribution channels domestically or internationally; anticipated international expansion may not occur in the next quarter; the Company may not adopt successful advertising strategies or marketing methods; the Company may not develop or sell complementary GSP RUSHFIT product lines and/or may not achieve sales of such products to existing customers in the quantum anticipated, or at all; the Company may not be able to launch a new fitness-based DVD series or product line starring a celebrity or athlete; there may be no increased sales during seasonal periods in the fourth quarter; the substantial investment of capital required to produce and market video and entertainment productions, the need to obtain additional financing and uncertainty as to the availability and terms of future financing, unpredictability of the commercial success of our programming, difficulties in integrating technological changes and other trends affecting the entertainment industry, significant competition in the global economic market, the possibility the rate of growth of the market for fitness media will slow, reliance on the health and marketability of celebrity fitness talent in productions owned by the Company, the possibility of competition from other ecommerce and online marketing vendors, the continued strong growth in adoption of digital media, the possibility of new fitness titles from traditional large studios that target the male demographic, large media production companies may move ecommerce operations in-house rather than outsourcing, reliance on production studios continuing to outsource ecommerce operations, reliance on a number of key employees, limited operating history, the possibility of claims against the intellectual property rights of the Company, the possibility of infringements upon the intellectual property rights of the Company; the Company may not have sufficiently budgeted for expenditures necessary to carry out planned activities; future operating results are uncertain and likely to fluctuate; the Company may not have the ability to raise additional financing required to carry out its business objectives on commercially acceptable terms, or at all; and volatility of the market price of the Company's shares.

A more complete discussion of the risks and uncertainties facing the Company is disclosed in the Company's Filing Statement dated November 16, 2010 and continuous disclosure filings with Canadian securities regulatory authorities at www.sedar.com. All forward-looking information herein is qualified in its entirety by this cautionary statement, and the Company disclaims any obligation to revise or update any such forward-looking information or to publicly announce the result of any revisions to any of the forward-looking information contained herein to reflect future results, events or developments, except as required by law.

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