**Exhibit 99.1**

 

 
| ** **                    | ** ** | **FOR IMMEDIATE RELEASE**                  |
|-------------------------------|------------|--------------------------------------------|
| ** **                    | ** ** | ** **                                 |
| Contacts:                     |       |                                       |
|                          |       | Stephen D. Axelrod, CFA                    |
| John Pougnet, CEO             |       | Alisa Steinberg (Media)                    |
| **XELR8 Holdings, Inc.** | ** ** | **Wolfe Axelrod Weinberger Assoc.****LLC** |
| (303)  316-8577               |       | (212)  370-4500                            |
| CEO@xelr8.com                 |       | steve@wolfeaxelrod.com                     |
|                          |       | alisa@wolfeaxelrod.com                     |

 

**XELR8 HOLDINGS ANNOUNCES FISCAL2007 FINANCIAL RESULTS**

 

**- Company Reports Record 2007 Revenue of $4.9Million, an Increase of 126% -**

 

**-****Removalof the Going Concern Qualification by its Independent Registered PublicAccountants -**

 

**-Management to Host Conference Call Today at 4:15 p.m. ET -**

 

**DENVER, Colo. – March 26,****2008 —XELR8 Holdings, Inc. (AMEX:BZI)**, a provider of functionalfoods, beverages and nutritional supplements, today announced its financialresults for the twelve months ended December 31, 2007.

 

Financial and operational highlights for Fiscal 2007:

·                  Revenues increased 126% overprior year period

·                  Gross profit margin was 72%,up 800 basis points from 64% in 2006

·                  BaziTM represented 83% ofrevenues in 2007, major growth component

·                  Working capital of $2.1million as of December 31, 2007

 

Total revenue for the fiscal year ended December 31, 2007 was $4.9million, a 126% increase compared to total revenue of $2.1 million for thefiscal year ended December 31, 2006. Gross profit grew to $3.5 million forthe fiscal 2007, up 153% from $1.4 million in the prior year period. Net lossfor the year ended December 31, 2007, decreased 31% to $3.2 million, or$0.23 per share, compared to a loss of $4.7 million, or $0.48 per share, in theprior year.

 

The Company’s balance sheet continues to remain strong. As of December 31,2007, cash and cash equivalents were $2.25 million, excluding the proceeds fromthe February 2008 financing. Total shareholders’ equity at the end offiscal 2007 was $2.22 million and the Company remains debt free. As a result ofthe improved operating performance and the additional financing, the Company’sIndependent Registered Public Accountants have removed the going concernqualification from their report.

 

“I am pleased with XELR8’s performance in fiscal 2007,” said JohnPougnet, XELR8 CEO.  “Fiscal 2007 was apivotal year for XELR8, especially with the launch of our lead product Bazi, inJanuary 2007, which has become a dominant part of our revenues as well asour anchor for future growth.”

 

**- More -**

 

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Mr. Pougnet continued, “During fiscal 2007 we built an excellentfoundation for marketing Bazi, ending the year with 8,416 participantsnationwide. We have begun leveraging our distributor base in fiscal 2008through various means that we believe will not only assist them in buildingtheir current clientele, but also enhance our network by finding moredistributors to broaden our reach. In addition to our recent distributorconvention in Las Vegas, which was a resounding success, we have begun to offernew incentives and bonus features as well as incorporate regional “Go Diamond” events,to be hosted in six major cities nationwide in the coming weeks. It is eventslike these that enable us to keep in touch with our distributors and not onlyhelp in their growth, but also learn and grow from their success stories thatwe can then share network-wide.”

 

“Weare focused on attaining profitability and are getting closer to that goaldaily.  Fortunately, the Company is wellcapitalized and can undertake expenditures that will not only contribute ultimatelyto profitability but also strengthen our distribution network leading tobroader acceptance of our products and, in particular, Bazi,” concluded Mr. Pougnet.

 

Therewill be a conference call today at 4:15 p.m. ET with the investmentcommunity, featuring John Pougnet, Chief Executive Officer of XELR8 Holdings, Inc.Interested parties may participate in the call by dialing 877-407-8293;international callers dial 201-689-8349. In addition, a replay of theconference call will be available approximately two hours after the call hasended. The replay can be accessed at:www.xelr8tools.com/Media/ConfCall032608.mp3 and will be archived for 30 days.

 

**About XELR8 Holdings, Inc.**

 

XELR8Holdings, Inc. is a provider of nutritional foods and beverages designedto help enhance physical health and overall performance. **XELR8**has developed a comprehensive line of nutritional supplements and functionalfoods designed in systems that are easy to take, simple to understand, andconveniently fit within a lifestyle. These include the Company’sEat/Drink/Snack System; Peak Performance System; and its newest market entry, **BaziTM, a powerful, concentrated, antioxidant (Vitamins A, C &E) nutritional drink packed with eight different super fruits and berries,including the Chinese jujube plus 12 vitamins and 68 minerals, providing allthe daily vitamins and minerals you need in a single, convenient, one-ounceshot.**

 

**XELR8’s** commitment to quality, science and research hasearned the Company a loyal following of over 350 world-class athletes and anelite list of endorsers, such as 3-time World Series Champion Curt  Schilling, five-time Cy Young Award WinnerRandy Johnson; Super Bowl Champions Mike Alstott and Lawyer Milloy;professional football star Cadillac Williams; Olympians Briana Scurry andCaroline Lalive; Stanley Cup Winner Blake Sloan; and PGA Tour Professional TomPernice, Jr. XELR8 products are only available through independentdistributors located throughout the nation. For more information about XELR8,please visit www.xelr8.com or www.drinkbazi.com.

 

*Forward-lookingStatements*

 

*Thispress release contains forward-looking statements within the meaning of thePrivate Securities Litigation Reform Act of 1995, including prospects for **XELR8’s** distribution network. Actual results may differ fromthose discussed in such forward-looking statements. These forward-looking statementsinclude risks and uncertainties that include the Company’s ability to attractand retain distributors; changes in demand for the Company’s products; changesin the level of operating expenses; changes in general economic conditions thatimpact consumer behavior and spending; product supply; the availability,amount, and cost of capital for the Company; and the Company’s use of suchcapital. More information about factors that potentially could affect theCompany’s financial results is included in the Company’s filings with theSecurities and Exchange Commission, including its Annual Report on Form 10-KSBfor the year ended December 31, 2006 and all subsequent filings. Certainstatements in this release regarding the Company’s agreements are in accordancewith the guidelines established by the Federal Trade Commission forendorsements in advertising.*

 

**- Financial Tables to Follow -**

 

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** **

**XELR8HOLDINGS, INC.**

# **CONSOLIDATED BALANCE SHEETS**

# **For the Years Ended December 31,2007 and 2006**

** **
| ** **                                                                                                                           | ** ** | **2007**    | ** ** | **2006**    | ** ** |
|--------------------------------------------------------------------------------------------------------------------------------------|------------|-------------|------------|-------------|------------|
| **ASSETS**                                                                                                                           |       |        |       |        |       |
| Current assets:                                                                                                                      |       |        |       |        |       |
| Cash and cash  equivalents                                                                                                           |       | $           | 2,245,858  |        | $          | 76,147 |   |
| Accounts  receivable, net of allowance for doubtful accounts of $12,231 and $10,706,  respectively                                   |       | 7,460       |       | 4,785       |       |
| Inventory, net  of allowance for obsolescence of $189,403 and $41,655, respectively                                                  |       | 370,843     |       | 411,364     |       |
| Prepaid expenses  and other current assets                                                                                           |       | 329,015     |       | 259,292     |       |
| Total current  assets                                                                                                                |       | 2,953,176   |       | 751,588     |       |
|                                                                                                                                 |       |        |       |        |       |
| Intangible  assets, net                                                                                                              |       | 17,959      |       | 11,212      |       |
| Property and  equipment, net                                                                                                         |       | 81,405      |       | 123,943     |       |
| Deferred  offering and loan costs                                                                                                    |       | —      |       | 133,889     |       |
|                                                                                                                                 |       |        |       |        |       |
| Total assets                                                                                                                         |       | $           | 3,052,540  |        | $          | 1,020,632 |   |
|                                                                                                                                 |       |        |       |        |       |
| **LIABILITIES  AND SHAREHOLDERS’ EQUITY (DEFICIT)**                                                                             |       |        |       |        |       |
| Current  liabilities:                                                                                                                |       |        |       |        |       |
| Accounts payable  and accrued expenses                                                                                               |       | $           | 832,697    |        | $          | 1,160,916 |   |
| Short-term note  payable                                                                                                             |       | —      |       | 250,000     |       |
|                                                                                                                                 |       |        |       |        |       |
| Total  Liabilities                                                                                                                   |       | 832,697     |       | 1,410,916   |       |
|                                                                                                                                 |       |        |       |        |       |
| **Commitments  and Contingencies (Note 7)**                                                                                          |       |        |       |        |       |
|                                                                                                                                 |       |        |       |        |       |
| **SHAREHOLDERS’  EQUITY (DEFICIT) (Note 2):**                                                                                   |       |        |       |        |       |
| Preferred stock,  authorized 5,000,000 shares, $.001 par value, none issued or outstanding                                           |       | —      |       | —      |       |
| Common stock,  authorized 50,000,000 shares, $.001 par value, 15,197,170 and 10,097,170  shares issued and outstanding, respectively |       | 15,197      |       | 10,097      |       |
| Additional paid  in capital                                                                                                          |       | 22,696,657  |       | 16,849,900  |       |
| Accumulated  (deficit)                                                                                                               |       | (20,492,011 | )          | (17,250,281 | )          |
|                                                                                                                                 |       |        |       |        |       |
| Total  shareholders’ equity (deficit)                                                                                           |       | 2,219,843   |       | (390,284    | )          |
|                                                                                                                                 |       |        |       |        |       |
| Total  liabilities and shareholders’ equity                                                                                     |       | $           | 3,052,540  |        | $          | 1,020,632 |   |

 

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**XELR8HOLDINGS, INC.**

**CONSOLIDATEDSTATEMENTS OF OPERATIONS**

**Forthe Years Ended December 31, 2007 and 2006**

 
| ** **                                                          | ** ** | **2007**   | ** ** | **2006**   | ** ** |
|---------------------------------------------------------------------|------------|------------|------------|------------|------------|
|                                                                |       |       |       |       |       |
| Net revenue                                                         |       | $          | 4,853,046  |       | $          | 2,148,420 |   |
| Cost of goods  sold                                                 |       | 1,380,663  |       | 775,762    |       |
| Gross profit                                                        |       | 3,472,383  |       | 1,372,658  |       |
|                                                                |       |       |       |       |       |
| Operating  expenses:                                                |       |       |       |       |       |
| Selling and  marketing expenses                                     |       | 3,180,392  |       | 2,626,613  |       |
| General and  administrative expenses                                |       | 3,107,469  |       | 3,275,689  |       |
| Research and  development expenses                                  |       | 17,828     |       | 73,921     |       |
| Depreciation and  amortization                                      |       | 58,033     |       | 66,333     |       |
| Total operating  expenses                                           |       | 6,363,722  |       | 6,042,556  |       |
|                                                                |       |       |       |       |       |
| Net (loss) from  operations                                         |       | (2,891,339 | )          | (4,669,898 | )          |
| Other income  (expense)                                             |       |       |       |       |       |
| Interest income                                                     |       | 87,646     |       | 34,337     |       |
| Gain on  disposial of asset                                         |       | 1,500      |       | —     |       |
| Interest  (expense)                                                 |       | (439,537   | )          | (33,888    | )          |
|                                                                |       |       |       |       |       |
| Total other  income (expense)                                       |       | (350,391   | )          | 449        |       |
|                                                                |       |       |       |       |       |
| Net (loss)                                                          |       | $          | (3,241,730 | )          | $          | (4,669,449 | ) |
|                                                                |       |       |       |       |       |
| Net (loss) per  common share Basic and diluted net (loss) per share |       | $          | (0.23      | )          | $          | (0.48 | ) |
|                                                                |       |       |       |       |       |
| Weighted average  common shares outstanding, basic and diluted      |       | 13,951,691 |       | 9,714,021  |       |

 

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**XELR8HOLDINGS, INC.**

**CONSOLIDATEDSTATEMENTS OF CASH FLOWS**

**Forthe Years Ended December 31, 2007 and 2006**

 
| Cash flows from  operating activities:                              |   |       |       |       |   |
|---------------------------------------------------------------------|--------|------------|------------|------------|--------|
| Net income  (loss)                                                  |   | $          | (3,241,730 | )          | $      | (4,669,449 | ) |
| Adjustments to  reconcile                                           |   |       |       |       |   |
| Depreciation and  amortization                                      |   | 58,033     |       | 66,333     |   |
| (Gain) on sale  of equipment                                        |   | (1,500     | )          | —     |   |
| Stock and stock  options issued for services                        |   | 1,372,408  |       | 859,489    |   |
| Interest expense  and amortization related to bridge loan financing |   | 428,889    |       | —     |   |
| Change in  allowance for doubtful accounts                          |   | 1,525      |       | 5,243      |   |
| Change in  allowance for inventory obsolesence                      |   | 147,748    |       | 24,776     |   |
| Change in  allowance for product returns                            |   | 30,866     |       | 25,013     |   |
| Changes in  assets and liabilities:                                 |   |       |       |       |   |
| Accounts  receivable                                                |   | (4,200     | )          | (1,270     | )      |
| Inventory                                                           |   | (107,227   | )          | 106,609    |   |
| Other current  assets                                               |   | (69,723    | )          | (88,679    | )      |
| Accounts payable  and accrued expenses                              |   | 205,915    |       | 679,907    |   |
| Net cash (used)  by operating activities                            |   | (1,178,996 | )          | (2,992,028 | )      |
|                                                                |   |       |       |       |   |
| Cash flows from  investing activities:                              |   |       |       |       |   |
| Proceeds from  maturity of investments                              |   | —     |       | 110,000    |   |
| Proceeds from  sale of equipment                                    |   | 1,500      |       | —     |   |
| Capital  expenditures                                               |   | (22,242    | )          | (71,846    | )      |
| Net cash (used)  provided by investing activities                   |   | (20,742    | )          | 38,154     |   |
|                                                                |   |       |       |       |   |
| Cash flow from  financing activities:                               |   |       |       |       |   |
| Proceeds from  bridge loan financing                                |   | 250,000    |       | 250,000    |   |
| Repayments of  bridge financing                                     |   | (500,000   | )          | —     |   |
| Issuance of  common stock, net of offering costs                    |   | 3,619,449  |       | —     |   |
| Deferred  offering costs                                            |   | —     |       | (25,000    | )      |
| Net cash  provided by financing activities                          |   | 3,369,449  |       | 225,000    |   |
|                                                                |   |       |       |       |   |
| NET INCREASE  (DECREASE) IN CASH                                    |   | 2,169,711  |       | (2,728,874 | )      |
| CASH AND CASH  EQUIVALENTS, BEGINNING OF THE PERIOD                 |   | 76,147     |       | 2,805,021  |   |
| CASH AND CASH  EQUIVALENTS, END OF THE PERIOD                       |   | $          | 2,245,858  |       | $      | 76,147 |   |
|                                                                |   |       |       |       |   |
| **SUPPLEMENTAL  CASH FLOW DISCLOSURE**                              |   |       |       |       |   |
| Cash paid for  interest                                             |   | $          | 13,425     |       | $      | — |   |
| Stock issued for  satisfaction of accrued compensation expense      |   | $          | 540,000    |       | $      | — |   |
| Deferred  offering costs applied against proceeds from offering     |   | $          | 25,000     |       | $      | — |   |

# ** **

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