Guardion Health Sciences, Inc. (Nasdaq: GHSI) (“Guardion” or the
“Company”), a clinical nutrition and diagnostics company that
develops science-based, clinically supported nutritional
supplements, medical foods, and diagnostic products, announced
financial results for the three months and year ended December 31,
2020.
Effective March 1, 2021, the Company amended its
Certificate of Incorporation to effectuate a 1-for-6 reverse split
of its outstanding common stock. Accordingly, all share and per
share amounts included herein have been retroactively adjusted to
reflect the reverse stock split for all periods presented.
Financial highlights for the year ended December
31, 2020 include the following:
- Total revenue of $1,889,844 for the
year ended December 31, 2020, as compared to $902,937 for the year
ended December 31, 2019, an increase of approximately 109%.
- Net loss for the year ended
December 31, 2020 of $(8,571,657) or $(0.60) per share, as compared
to a net loss of $(10,878,308) or $(1.79) per share for the year
ended December 31, 2019.
- Cash balance at December 31, 2020
of $8,518,732.
- Pro forma cash balance at December
31, 2020 of $45,727,241, after giving effect to the sale of common
stock and the exercise of warrants during January and February
2021.
Corporate highlights for the fourth quarter
ended December 31, 2020 include the following:
- The Company appointed seasoned
nutritional products industry veteran Bret Scholtes as President
and Chief Executive Officer, and as a member of the Board of
Directors.
- The Company retained an investment
banking firm to act as its exclusive financial advisor to assist
management and the Board of Directors in the identification and
evaluation of strategic transactions to enhance shareholder
value.
- Ho Wah Genting Berhad, the
Company’s exclusive Malaysian distributor, advised Guardion that
Astramern Astra H (formerly Astramern Nutra H), an immune support
dietary supplement designed and produced by the Company, was
granted product registration approval by the Malaysian National
Pharmaceutical Regulatory Agency. Previously, in August 2020, the
Company had announced the product registration approval of the
vitamin formulation Astramern NutraV.
- New data was published in the
journal Nutrients (published October 26, 2020) that the efficacy of
the Company’s Lumega-Z® compared to the current standard of care,
the AREDS-2 soft gel supplement (marketed under the PreserVision®
brand by Bausch + Lomb) in patients with vision problems associated
with eye disease. Lumega-Z® demonstrated statistically significant
vision improvements in both eyes at six months (p < 0.001), and
a positive linear trend with treatment time (p < 0.001), with
benefits evident after just three months. This compares to no
significant change (p > 0.05) provided by the AREDS-2 supplement
gel cap formulation.
- A trademark was issued for
“NutriGuard” on October 27, 2020 by the U.S. Patent and Trademark
Office under Class 5 – nutritional dietary supplements.
Bret Scholtes, Guardion’s President and Chief
Executive Officer, commented, “As it was for many companies, 2020
was a year of transition and challenge on multiple fronts. I joined
the Company in January 2021 to lead the effort to build Guardion
into a leading clinical nutrition company with the objective that
it become a top performing growth company. As a start, our team has
taken the first three months of 2021 to begin to assess the
business, the core fundamentals, and the market opportunity for the
Company’s products and services. I am excited by the prospects of
the business, evidenced, in part, by the increased revenue on a
year-over-year basis and the critical third-party validation of our
science that we received in 2020. We plan to continue such efforts
in future periods.”
Mr. Scholtes continued, “We have much to do in
the coming months before we will be in a position to implement and
accelerate our growth initiatives. We are focused on building a
strong foundation by developing a business model and infrastructure
that are designed for long-term commercial success. We have started
this process by concentrating on certain key areas, including our
business strategy, go-to-market capabilities, scientific affairs
and human capital. We are also beginning the process of
establishing our nascent brands and identifying core customer bases
where we can accelerate our marketing efforts once our clinical
support and scientific evidence is in place.”
Mr. Scholtes concluded, “This process will take
time, but we have already taken two important steps to build a
stronger company. We have raised sufficient capital to not only
fund the process -- but also to accelerate the process -- of
building the Company through organic growth and carefully
considered strategic acquisitions. Our recent at-the-market equity
financings in 2021 generated gross proceeds of $35,000,000 and the
exercise of warrants in 2021 generated net proceeds of $3,608,509.
In addition, our recent reverse stock split enabled us to come into
full compliance with Nasdaq’s continued listing rules regarding
minimum bid stock price. Over the long-term, the key to our success
will be to create value in well-differentiated and robust brands
through strong clinically proven claims that address consumer needs
in growing markets, both domestically and internationally. We are
committed to bringing compelling products to market under
meaningful and differentiated brands supported by strong science.
We appreciate the patience and support of our shareholders as we
focus on the Company’s evolution during 2021.”
Financial Results
Years Ended December 31, 2020 and
2019
Total revenue for the year ended December 31,
2020 increased by approximately 109% to $1,889,844, as compared
total revenue for the year ended December 31, 2019 of $902,937,
primarily due to an initial order from the Company’s Malaysian
distributor of $890,000 for a novel nutraceutical formulation
designed to support the body’s immune function.
Operating expenses for the year ended December
31, 2020 were $8,494,940, as compared to operating expenses for the
year ended December 31, 2019 of $11,058,559. Operating expenses in
2020 included a $615,936 reduction to expense associated with the
settlement with the former Chief Executive Officer, while operating
expenses in 2019 included a goodwill impairment charge of
$1,563,520.
Net loss for the year ended December 31, 2020
was $(8,571,657), which included inventory write-downs of $971,719,
offset by a net gain from the settlement with the former Chief
Executive Officer of $615,936. Net loss for the year ended December
31, 2019 was $(10,878,308), which included a goodwill impairment
charge of $1,563,520. Taking all of these factors into account, net
loss decreased by approximately 21% in 2020 as compared to
2019.
About Guardion Health
Sciences
Guardion Health Sciences, Inc. (NASDAQ: GHSI),
is a clinical nutrition and diagnostics company. Guardion’s
portfolio of science-based, clinically supported nutrition, medical
foods, and diagnostic products support healthcare professionals,
their patients, and consumers in achieving health goals. Guardion’s
commercial and developmental initiatives are supported by equally
impressive scientific and medical advisory boards, led by seasoned
business executives and physicians with many years of experience.
This combination of expertise and scientific knowledge forms the
foundation of Guardion’s growing position within the eye care
industry and the clinical nutrition marketplace. Information and
risk factors with respect to Guardion and its business, including
its ability to successfully develop and commercialize its
proprietary products and technologies, may be obtained in the
Company’s filings with the U. S. Securities and Exchange Commission
(the “SEC”) at www.sec.gov.
Forward-Looking Statement
Disclaimer
With the exception of the historical information
contained in this news release, the matters described herein may
contain forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. Statements
preceded by, followed by or that otherwise include the words
“believes,” “expects,” “anticipates,” “intends,” “projects,”
“estimates,” “plans” and similar expressions or future or
conditional verbs such as “will,” “should,” “would,” “may” and
“could” are generally forward- looking in nature and not historical
facts, although not all forward-looking statements include the
foregoing. These statements involve unknown risks and uncertainties
that may individually or materially impact the matters discussed
herein for a variety of reasons that are outside the control of the
Company, including, but not limited to, the Company’s ability to
raise sufficient financing to implement its business plan, the
impact of the COVID-19 pandemic on the Company’s business,
operations and the economy in general, and the Company’s ability to
successfully develop and commercialize its proprietary products and
technologies. Readers are cautioned not to place undue reliance on
these forward- looking statements, as actual results could differ
materially from those described in the forward-looking statements
contained herein. Readers are urged to read the risk factors set
forth in the Company’s filings with the SEC, which are available at
the SEC’s website (www.sec.gov). The Company disclaims any
intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise.
Investor Relations Contact:CORE IRScott
Arnold516-222-2560scotta@coreir.com
Media Relations Contact:Jules AbrahamDirector
of Public RelationsCORE IR917-885-7378julesa@coreir.com
Guardion Health Sciences,
Inc.
Consolidated Balance Sheets
|
|
December 31, |
|
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets |
|
|
|
|
|
|
|
|
Cash |
|
$ |
8,518,732 |
|
|
$ |
11,115,502 |
|
Accounts receivable |
|
|
11,248 |
|
|
|
78,337 |
|
Inventories |
|
|
384,972 |
|
|
|
310,941 |
|
Prepaid expenses |
|
|
179,931 |
|
|
|
362,938 |
|
|
|
|
|
|
|
|
|
|
Total current
assets |
|
|
9,094,883 |
|
|
|
11,867,718 |
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
11,751 |
|
|
|
11,751 |
|
Property and equipment,
net |
|
|
285,676 |
|
|
|
374,638 |
|
Operating lease right-of-use
asset, net |
|
|
418,590 |
|
|
|
572,714 |
|
Intangible assets, net |
|
|
50,000 |
|
|
|
50,000 |
|
|
|
|
|
|
|
|
|
|
Total
assets |
|
$ |
9,860,900 |
|
|
$ |
12,876,821 |
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
608,313 |
|
|
$ |
129,132 |
|
Accrued expenses |
|
|
127,637 |
|
|
|
116,211 |
|
Payable to former officer |
|
|
148,958 |
|
|
|
- |
|
Derivative warrant liability |
|
|
25,978 |
|
|
|
13,323 |
|
Operating lease liability - current |
|
|
162,845 |
|
|
|
151,568 |
|
|
|
|
|
|
|
|
|
|
Total current
liabilities |
|
|
1,073,731 |
|
|
|
410,234 |
|
|
|
|
|
|
|
|
|
|
Operating lease liability –
long-term |
|
|
271,903 |
|
|
|
434,747 |
|
|
|
|
|
|
|
|
|
|
Total
liabilities |
|
|
1,345,634 |
|
|
|
844,981 |
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock, $0.001 par
value; 10,000,000 shares authorized; no shares issued and
outstanding at December 31, 2020 and December 31, 2019 |
|
|
- |
|
|
|
- |
|
Common stock, $0.001 par
value; 250,000,000 shares authorized; 15,170,628 and 12,497,094
shares issued and outstanding at December 31, 2020 and December 31,
2019 |
|
|
15,171 |
|
|
|
12,497 |
|
Additional paid-in
capital |
|
|
62,583,423 |
|
|
|
57,531,014 |
|
Accumulated deficit |
|
|
(54,083,328 |
) |
|
|
(45,511,671 |
) |
|
|
|
|
|
|
|
|
|
Total stockholders’
equity |
|
|
8,515,266 |
|
|
|
12,031,840 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders’ equity |
|
$ |
9,860,900 |
|
|
$ |
12,876,821 |
|
Guardion Health Sciences,
Inc.
Consolidated Statements of
Operations
|
|
Years Ended December 31, |
|
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
Revenue |
|
|
|
|
|
|
|
|
Medical foods |
|
$ |
1,609,482 |
|
|
$ |
444,657 |
|
Medical devices |
|
|
275,862 |
|
|
|
434,010 |
|
Other |
|
|
4,500 |
|
|
|
24,270 |
|
Total
revenue |
|
|
1,889,844 |
|
|
|
902,937 |
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold |
|
|
|
|
|
|
|
|
Medical foods (includes inventory write-down of $760,488 during the
year ended December 31, 2020) |
|
|
1,599,510 |
|
|
|
155.212 |
|
Medical devices (includes inventory write-down of $211,231 during
the year ended December 31, 2020) |
|
|
344,647 |
|
|
|
178,815 |
|
Other |
|
|
2,478 |
|
|
|
7,288 |
|
Total cost of goods
sold |
|
|
1,946,635 |
|
|
|
341,315 |
|
|
|
|
|
|
|
|
|
|
Gross profit
(loss) |
|
|
(56,791 |
) |
|
|
561,622 |
|
|
|
|
|
|
|
|
|
|
Operating
expenses |
|
|
|
|
|
|
|
|
Research and development |
|
|
160,978 |
|
|
|
194,311 |
|
Sales and marketing |
|
|
1,450,205 |
|
|
|
1,874,901 |
|
General and administrative |
|
|
7,450,245 |
|
|
|
7,425,827 |
|
Costs related to resignation of former officer (including the
reversal of previously recognized stock compensation expense of
$965,295 during the year ended December 31, 2020) |
|
|
(615,936 |
) |
|
|
- |
|
Loss on sales of equipment |
|
|
18,500 |
|
|
|
- |
|
Equipment impairment |
|
|
30,948 |
|
|
|
- |
|
Goodwill impairment |
|
|
- |
|
|
|
1,563,520 |
|
|
|
|
|
|
|
|
|
|
Total operating
expenses |
|
|
8,494,940 |
|
|
|
11,058,559 |
|
|
|
|
|
|
|
|
|
|
Loss from
operations |
|
|
(8,551,731 |
) |
|
|
(10,496,937 |
) |
|
|
|
|
|
|
|
|
|
Other income
(expenses): |
|
|
|
|
|
|
|
|
Interest expense |
|
|
(7,271 |
) |
|
|
(258,365 |
) |
Finance cost upon issuance of warrants |
|
|
- |
|
|
|
(415,955 |
) |
Change in fair value of derivative liability |
|
|
(12,655 |
) |
|
|
292,949 |
|
|
|
|
|
|
|
|
|
|
Total other income
(expenses) |
|
|
(19,926 |
) |
|
|
(381,371 |
) |
|
|
|
|
|
|
|
|
|
Net loss |
|
|
(8,571,657 |
) |
|
|
(10,878,308 |
) |
|
|
|
|
|
|
|
|
|
Net loss per common share –
basic and diluted |
|
$ |
(0.60 |
) |
|
$ |
(1.79 |
) |
Weighted average common shares
outstanding – basic and diluted |
|
|
14,256,856 |
|
|
|
6,078,014 |
|
Guardion Health Sciences,
Inc.
Operations by Segment
|
|
For the Year Ended December 31, 2020 |
|
|
|
Corporate |
|
|
MedicalFoods andNutraceuticals |
|
|
MedicalDevices |
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
4,500 |
|
|
$ |
1,609,482 |
|
|
$ |
275,862 |
|
|
$ |
1,889,844 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold |
|
|
2,478 |
|
|
|
1,599,510 |
|
|
|
344,647 |
|
|
|
1,946,635 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
(loss) |
|
|
2,022 |
|
|
|
9,972 |
|
|
|
(68,785 |
) |
|
|
(56,791 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock compensation
expense |
|
|
544,127 |
|
|
|
- |
|
|
|
- |
|
|
|
544,127 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses |
|
|
3,757,945 |
|
|
|
3,892,899 |
|
|
|
299,969 |
|
|
|
7,950,813 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations |
|
$ |
(4,300,050 |
) |
|
$ |
(3,882,927 |
) |
|
$ |
(368,754 |
) |
|
$ |
(8,551,731 |
) |
|
|
As of December 31, 2020 |
|
|
|
Corporate |
|
|
MedicalFoods andNutraceuticals |
|
|
MedicalDevices |
|
|
Total |
|
Current assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash |
|
$ |
8,518,732 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
8,518,732 |
|
Inventories, net |
|
|
- |
|
|
|
254,879 |
|
|
|
130,093 |
|
|
|
384,972 |
|
Other |
|
|
- |
|
|
|
89,333 |
|
|
|
101,846 |
|
|
|
191,179 |
|
Total current
assets |
|
|
8,518,732 |
|
|
|
344,212 |
|
|
|
231,939 |
|
|
|
9,094,883 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Right of use asset |
|
|
- |
|
|
|
374,447 |
|
|
|
44,143 |
|
|
|
418,590 |
|
Property and equipment,
net |
|
|
- |
|
|
|
135,641 |
|
|
|
150,035 |
|
|
|
285,676 |
|
Intangible assets, net |
|
|
- |
|
|
|
50,000 |
|
|
|
- |
|
|
|
50,000 |
|
Other |
|
|
- |
|
|
|
11,751 |
|
|
|
- |
|
|
|
11,751 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets |
|
$ |
8,518,732 |
|
|
$ |
916,051 |
|
|
$ |
426,217 |
|
|
$ |
9,860,900 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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