Small and unknown companies sometimes get celebrities to endorse their product or brand.
In exchange for endorsing the company’s product, the celebrity sometimes gets shares in the company.
Once such example is when Justin Bieber agreed to act as a spokesman for DriveSafe software from Options Media Group Holdings (OPMG).
Options Media Group markets an app that blocks a car driver from texting, Web surfing and making outgoing calls while driving.
As part of the deal, Bieber got warrants to purchase 121 million shares of common stock at a penny per share, or a total of 16.4% of the company, which can be exercised over three years.
Sounds great, right?
As it turned out, Bieber associated himself with and become part owner of a company in financial trouble.
Another small company that is doing the celebrity endorser is Fuse Science. Fuse Science have been using athletes such as Tiger Woods, Arian Foster, David Ortiz and many others to endorse the Fuse Science brand and products.
While there is nothing wrong with using celebrity endorsers, as it is a great way to get a brand out there.
A great example that helped a small company get some brand awareness is when Rap artist Curtis Jackson, known as 50 Cent, endorsed Vitamin Water early on when the company was unknown. As part of the endorsement deal, 50 Cent obtained a minority share of the company. The company went on to be very successful and is now owned by Coca-Cola.
Getting back to Fuse Science — So is Fuse Science really a scam?
Well, the answer to that is no.
The company has real products with real revenues.
In fact, its products are being sold on GNC, Amazon, Golf Galaxy and more to come this year.
Its products have received very positive reviews on Amazon and GNC.
Fuse Science’s product lineup currently consists of three products: EnerJel, PowerFuse and ElectroFuse.
Lets take a look at these products:
EnerJel™ is an innovative, performance-driven topical muscle and joint rub which utilizes cutting edge delivery system. This proprietary formulation helps address site specific muscle fatigue, and helps you feel energized to push through the game. EnerJel™ penetrates the skin layers to deliver an energized feeling With natural anti-inflammatory. It is made with all natural ingredients.
PowerFuse™ is Fuse Science’s first energy formula in a drop. Administered quickly and easily in your mouth. PowerFuse™ allows for optimal absorption, so that you feel energized and are able to perform at your natural best throughout the game, workout or day. It is available in a great tasting Berry Blast flavor
ElectroFuse™ is Fuse Science’s first electrolyte formula in a drop. Administered quickly and easily in the mouth, ElectroFuse™ allows for optimal absorption of the electrolytes for more immediate replenishment and effect. ElectroFuse™ contains natural ingredients and is available in a great tasting Salty Sweet flavor.
Fuse Science has a variety of athlete endorsements, their biggest one is Tiger Woods. In addition, the company has signed other marquee athletes such as NFL stars Arian Foster, Ronde Barber and baseball stars David Ortiz and Ken Griffey Jr.
There is also a variety of big name athletes in other sports that have signed up to endorse Fuse Science. Most likely these athletes receive shares in the company to endorse the company and its products.
The Real Problem with Fuse Science
The problem with Fuse Science is its stock. Fuse Science stock, which traders over-the-counter under the ticker symbol DROP, saw its shares explode higher in 2011 when the endorsement deal with Tiger Woods was announced. Alot of hype around Fuse Science caused the stock to get way ahead of itself.
At that time, the company was signing athlete after athlete and did not have an actual product for sale on the retail market. Therefore, some people were claiming Fuse Science was a scam. However, the company has since proved many critics wrong and has brought its product to market the past year.
The other problem with Fuse Science stock is it has been heavily diluted the past few years. Because of the dilution it has caused the stock to drop.
Perhaps the company has issued new shares so that they can give to their athlete endorsers. I’m sure Tiger Woods has a large chunk of shares.
However, this is normal for any start up company. The company is in its infancy and needs the financing to keep moving forward. Therefore, the company issues more shares.
Here is a look at Fuse Science stock outstanding share count over the past few years:
On December 31, 2011 the outstanding share count was 94,278,706
17,396,663 shares were issued towards debt conversions
300,000 shares were issued for consulting services
7,917,601 shares were issued to raise capital and pay services through warrants
On March 31, 2012 the outstanding share count was 119,892,297
4,917,337 shares were issued towards debt conversions
400,000 shares issued for consulting services
3,972,852 shares issued to raise capital and pay services through warrants
On June 30, 2012 the outstanding share count was 128,519,270
About 12.7 million shares were issued towards debt converstion
About 4.5 million shares were issued to raise capital to pay services through warrants.
As of February 15, 2013 there are 182,265,845 shares outstanding
Fuse Science – Looking Ahead
Like many penny stock companies, there is always doubt surrounding the company whether it can survive or if it is legit and not a scam. I believe Fuse Science is the real deal and does have alot of potential with its technology.
While Fuse Science have been signing athlete after athlete to endorse the Fuse Brand, the company has been improving its financial situation. Remember the company is in its infancy, the company does have real products with real revenue.
I don’t think Tiger Woods would have endorsed the company if it was a scam. Tiger genuinely believes in the company’s product and sees its technology as a game changer.
Tiger Woods said the company is an inovated company with an amazing group of scientists. Woods said he signed with Fuse Science because of the company’s technology, which can deliver nutritional supplements and medicine that are more easily absorbed by the body.
“There really isn’t anything else out there like this, how the electrolytes get in to your system in 90 seconds,” said Woods, who had scientists confirm the efficacy of the gel product. “If you’re at the point you’re dehydrated, it’s too late. We need to stay ahead of the curve.”
I wouldn’t recommend buying any shares of FUSE Science (DROP). The reason for that is that shares have been heavily diluted and I don’t really see shares moving higher because of the dilution.
With that being said, I do believe the company has very interesting products with potential.
Imagine how much criticism Tiger would get if Fuse Science was a scam. The Tiger Wood’s brand itself would lose alot of credibility if he was falsely endorsing a product he has never used and if he was associated with and endorsed a company that turned out to be a scam.
To get Tiger as an endorser it must have been quite the ordeal. I’m sure Tiger Wood’s whole team of lawyers, marketers, PR people and others investigated Fuse Science and did their due diligence on the company before Tiger decided to partner with the company.
Check out the video below. Tiger seems to believe in FUSE Science’s technology. And after researching the company, I’m sure Tiger’s team of people figure that as well.