Vemma still losing money, losses in decline
Vemma’s second quarter report for 2016 was filed on June 20th.
The good news? Net losses are on the decline and there might light at the end of the tunnel yet.
Month on month, March to April 2016 saw Vemma post average sales of $942,324.
- March 2016 = $998,606
- April 2016 = $919,309
- May 2016 = $909,057
Overall losses are on the decline, with May marking a 43% decline in losses over April ($161,595 and $283,002 respectively).
Vemma appears to be covering its ongoing losses via loans. A cousin of BK Boreyko recently loaned Vemma $500,000.
Since debuting their new retail orientated compensation plan, Vemma’s commission expenses have dropped from an average of 42% to just 11%.
With affiliates no longer purchasing product to qualify for commissions however, overall sales revenue is also a shadow of what it was prior to the FTC lawsuit.
Another challenge Vemma has recently had to deal with is fraud.
In March and April, 2016, Vemma was the victim of certain fraudulent transactions.
The company became aware of the matter and took several actions to stop the fraudulent conduct.
Credit charge backs spiked to $10,169 in April, 2016. They seem to be under control again, with May 2016 seeing only $412 in charge backs.
Rather than acknowledge the impact of having to pay commissions on 50% or more retail sales per affiliate, Vemma continues to blame the Temporary Receiver for its losses.
The monthly loss shown on the Vemma income statement is solely a result of extraordinary expenses that arose from the Temporary Receiver’s worldwide shutdown of the business.
Vemma has been addressing these expenses on a case by case basis.
This despite confirmation Vemma was losing large amounts of money prior to the Temporary Receiver’s appointment.
The next quarter’s sales will be crucial for Vemma, with June and July in particular revealing whether the company’s revenue continues to decline or holds at $900,000.
June so far appears to be promising, with Vemma’s report citing $504,637 in revenue for June 1st to 15th.
Footnote: Our thanks to [email protected] for providing a copy of Vemma’s Quarterly Report Dated June 20, 2016.