Immunology

Inergetics, Inc. (OTCBB: NRTI), a leading developer of nutritional supplements, yesterday filed its 10-Q for the first quarter ending March 31, 2014.

• Total revenues generated from the sales of Martha Stewartâ„¢ Essentials, Surgex® Sports Nutrition, Bikini Ready®, SlimTrimâ„¢ and Muscle Maker Grill® "42" for the quarter ended March 31, 2014 totaled $479,802, an increase of 6,982% from the quarter ended March 31, 2013 which totaled $6,775.
• Gross profit for the quarter amounted to $117,119 for a 24% gross margin.  Gross profit increased $115,194 or 5,745% compared to $2,005 for the quarter ended March 31, 2013.
• After research, development and selling costs and general and administrative expenses of $3,145,128, an operating loss of $3,027,929 was realized for the quarter.  Operating losses increased $1,753,232 compared to the first quarter of 2013.  The majority of this increase was due to the increase in royalty payments and promotion and marketing costs to support the launch of Inergetics' range of products.
• The net result for the quarter was a loss of $4,785,499 or $0.07 per share, compared to a loss of $2,024,151 or $0.04 per share for the first quarter of 2013.  The net loss increased by $2,761,348 compared to the first quarter of 2013, primarily due to an increase in selling, general and administrative expenses associated with the expansion of the company's product lines.

Revenue recognition

Revenue is recognized upon shipment to various retail outlet customers when all performance obligations are met and collectability is reasonably assured.  Upon shipment to specific retail customers with the right of return under the U.S. Generally Accepted Accounting Principles, Inergetics defers revenues as returns are not reasonably estimable.  As of March 31, 2014 and December 31, 2013, deferred revenue totaled $1,010,178 and $1,268,470, respectively.

"Our first quarter earnings highlight the substantial progress made by Inergetics over the past twelve months.  Year-on-year, we have significantly increased total revenues through the successful launch of Martha Stewart Essentials and the newly formulated Surgex brand, along with the introduction of Bikini Ready and SlimTrim to major U.S. retailers this quarter," said Mike James, CEO.  "We continue to see strong demand for our products and interest in our innovative development pipeline from leading retailers in the U.S. and internationally, which I am confident will be realized in our numbers in the coming months as we continue to invest in the growth of the business."

Key developments in the quarter