Guardion Health Sciences Reports June 30, 2019 Interim Results of Operations
August 12 2019 - 8:40AM
Guardion Health Sciences, Inc. (“Guardion” or the “Company”)
(Nasdaq: GHSI), today announced its unaudited interim financial
results for the three months and six months ended June 30, 2019.
FINANCIAL HIGHLIGHTS
(Unaudited):
Second Quarter - Three Months Ended June
30, 2019:
• |
Total revenue increased by $40,192 or 18.2% to $260,970 for the
three months ended June 30, 2019, as compared to $220,778 for the
three months ended June 30, 2018. The increase was primarily due to
growth in the Company’s Lumega-Z customer base and in its
VectorVision vision testing diagnostic products. |
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• |
Gross profit margin was 62.8% for the three months ended June 30,
2019, as compared to 60.2% for the three months ended June 30,
2018, reflecting primarily an improved profitability in the medical
foods segment. |
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• |
Research and development costs were $77,688 for the three months
ended June 30, 2019, as compared to $34,320 for the three months
ended June 30, 2018, an increase of $43,368 or 126.4%. The increase
was due to primarily to engineering development costs associated
with the development of the Company’s CSV-2000 VectorVision
product. |
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• |
Sales and marketing costs were $409,409 for the three months ended
June 30, 2019, as compared to $378,750 for the three months ended
June 30, 2018, an increase of $30,659 or 8.1%. |
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• |
General and administrative costs (including stock-based
compensation costs) were $2,489,011 for the three months ended June
30, 2019, as compared to $1,034,914 for the three months ended June
30, 2018, an increase of $1,454,097 or 140.5%, primarily as a
result of an in increase in stock-based compensation of
approximately $976,00, as well as increases in insurance, investor
relations, labor, legal, professional fees and travel costs. |
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• |
Loss from operations was $2,812,194 for the three months ended June
30, 2019, as compared to $1,314,982 for the three months ended June
30, 2018, an increase of $1,497,212, or 113.9%, reflecting
increased general and administrative costs. |
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• |
Other (income) expense consisted of a net expense of $236,154 for
the three months ended June 30, 2019, as compared to a net expense
of $495,101 for the three months ended June 30, 2018. The
components of such amounts consisted of interest expense of
$234,065, finance costs associated with the issuance of warrants of
$229,921, net of a gain on the change in the fair value of
derivative warrants of $227,832 for the three months ended June 30,
2019, as compared to interest expense of $710 and a loss incurred
on the extension of warrant expiration dates of $494,391 for the
three months ended June 30, 2018. |
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• |
Net loss increased by $1,238,265 or 68.4% to $3,048,348 for the
three months ended June 30, 2019, as compared to $1,810,083 for the
three months ended June 30, 2018. Basic loss per share for the
three months ended June 30, 2019 was $0.14 per share, as compared
to $0.09 per share for the three months ended June 30, 2018. |
First Half - Six Months Ended June 30,
2019 (Unaudited):
• |
Total revenue increased by $89,690 or 21.7% to $503,508 for the six
months ended June 30, 2019, as compared to $413,818 for the three
months ended June 30, 2018. The increase was primarily due to
growth in the Company’s Lumega-Z customer base and in its
VectorVision vision testing diagnostic products. |
|
|
• |
Gross profit margin was 62.2% for the six months ended June 30,
2019, as compared to 59.6% for the six months ended June 30, 2018,
reflecting primarily an improved profitability in the medical foods
segment. |
|
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• |
Research and development costs were $106,716 for the six months
ended June 30, 2019, as compared to $194,708 for the six months
ended June 30, 2018, a decrease of $87,992 or 45.2%. The decrease
was due to primarily to due to reduced engineering development
costs associated with the Company’s MapcatSF® medical device during
2019, partially offset by engineering costs associated with the
development of the Company’s CSV-2000 VectorVision product. |
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• |
Sales and marketing costs were $764,028 for the six months ended
June 30, 2019, as compared to $984,464 for the six months ended
June 30, 2018, a decrease of $220,436 or 22.4%, reflecting the
Company’s transition to an in-house sales organization since
mid-2018, as compared to utilizing an outside party sales
organization during a substantial portion of the six months ended
June 30, 2018. |
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• |
General and administrative costs (including stock-based
compensation costs) were $3,439,633 for the six months ended June
30, 2019, as compared to $2,714,680 for the six months ended June
30, 2018, an increase of $724,953 or 26.7%, primarily as a result
of an in increase in stock-based compensation of approximately
$254,000, as well as increases in insurance, investor relations,
labor, legal, professional fees and travel costs. |
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• |
Loss from operations was $3,997,417 for the six months ended June
30, 2019, as compared to $3,647,089 for the six months ended June
30, 2018, an increase of $350,328, or 9.6%, reflecting increased
general and administrative costs. |
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• |
Other (income) expense consisted of a net expense of $439,760 for
the six months ended June 30, 2019, as compared to a net expense of
$495,936 for the six months ended June 30, 2018. The components of
such amounts consisted of interest expense of $251,637, finance
costs associated with the issuance of warrants of $415,955, net of
a gain on the change in the fair value of derivative warrants of
$227,832 for the six months ended June 30, 2019, as compared to
interest expense of $1,545 and a loss incurred on the extension of
warrant expiration dates of $494,391 for the six months ended June
30, 2018. |
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• |
Net loss increased by $294,152 or 7.1% to $4,437,177 for the six
months ended June 30, 2019, as compared to $4,143,025 for the six
months ended June 30, 2018. Basic loss per share for the six months
ended June 30, 2019 and 2018 was $0.21 per share. |
Liquidity:
As of June 30, 2019, the Company had cash of
$2,368,645 and working capital of $2,326,641. The Company is
continuing its efforts to increase its working capital resources to
fund the planned growth in its operations, both domestically and
internationally.
BUSINESS AND OPERATIONAL HIGHLIGHTS
(year-to-date):
• |
On August 6, 2019, the Company announced that its standardized
vision testing instrument, the CSV-1000, has been selected by the
Foundation Fighting Blindness for inclusion in a large-scale
multi-center long-term clinical trial, the PRO-EYS Study. This
study is being conducted to evaluate vision loss and progression in
patients with degenerative retinal disease. There are expected to
be about 30 sites in the study, with each site having a dedicated
CSV-1000 device. |
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• |
On July 16, 2019, the Company was notified by the Patents Registry
in Hong Kong that it has received a patent from the Government of
the Hong Kong Special Administrative Region (Hong Kong Patent No.
HK1204758 titled “Apparatus for Use in the Measurement of Macular
Pigment Optical Density and/or Lens Optical Density of an Eye”) for
the MapcatSF®. |
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On June 4, 2019, the Company announced that the parent compound of
the GlaucoCetinTM formula was used in an IRB-approved patient study
conducted at the New York Eye and Ear Infirmary and successfully
reversed mitochondrial dysfunction in the optic nerve cells in
patients with glaucoma. GlaucoCetinTM is an enhanced formulation of
GlaucoHealth. The Company owns both formulas and has a patent
application pending on the GlaucoCetinTM formula. |
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On May 30, 2019, the Company was notified by the European Patent
Office that it has received a patent from the European Union
(European Patent No. 2,811,892 titled “Apparatus for Use in the
Measurement of Macular Pigment Optical Density and/or Lens Optical
Density of an Eye”) for the MapcatSF®. |
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On May 9, 2019, the Company announced a recent study that showed
statistically significant improvement in visual function (“CSF”) of
patients taking Lumega-Z who participated in the study. The study
was conducted by research scientists at the Western University
College of Optometry to evaluate the visual benefits of Lumega-Z in
one group of patients as compared to a group of patients taking
AREDS 2 soft gel supplements. |
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The results of the study were presented at the Association for
Research in Vision and Ophthalmology (“ARVO”) 2019 annual meeting
and showed improvements in visual function (“CSF”) in the group of
patients taking Lumega-Z that were statistically significant and
definitive. The patients taking AREDS 2 showed no statistical
change. |
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On April 25, 2019, the Company was notified by the State
Intellectual Property Office of the People’s Republic of China
(“China”) that the Company has been granted trademark registrations
in China for its proprietary medical food, Lumega-Z (Registration
No. 27151643), and for its proprietary and patented medical device,
the MapcatSF (Registration No. 27151644). |
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On April 9, 2019, the Company closed its initial public offering
(the “IPO”) of 1,250,000 shares of common stock, par value $0.001
per share, at an IPO price to the public of $4.00 per share
resulting in net proceeds to the Company of $3,888,000 after all
costs and expenses. The shares began trading on the Nasdaq Capital
Market on April 5, 2019 under the symbol “GHSI.” |
MANAGEMENT COMMENTARY:
Michael Favish, Guardion’s Chief Executive
Officer, commented, “We are encouraged with the continuing momentum
we are experiencing from our portfolio of proprietary technologies
and treatments. Effective vision therapies for an aging global
population are in increasing demand. As there are currently no
effective treatments for age-related macular degeneration and
glaucoma, the need to address these debilitating ocular diseases is
all the more imperative. Guardion’s products, supported by clinical
data, represent an array of compelling treatment solutions for the
medical profession, and we are now beginning to experience wider
recognition and adoption in the industry. We are planning to expand
our reach and, subject to adequate capital resources, we will be
taking the initial steps to scale up our sales efforts worldwide,
including in Asia, where we have been granted trademark
registrations in China and Hong Kong for our products. During the
remainder of 2019, our focus will remain on advancing our full line
of products aimed at transformative therapies for patients living
with these devastating ocular diseases.”
About Guardion Health Sciences,
Inc.
Guardion is an ocular health sciences company
that develops, formulates and distributes condition-specific
medical foods supported by evidence-based protocols, with a lead
medical food product, Lumega-Z®, that addresses a depleted macular
protective pigment, a known risk factor for age-related macular
degeneration (“AMD”) and a significant component of functional
vision performance. Guardion has also developed a proprietary
medical device, the MapcatSF®, which accurately measures the
macular pigment density, thereby providing the only two-pronged
evidence-based protocol for the treatment of a depleted macular
protective pigment. 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
Securities and Exchange Commission (“SEC”) at www.sec.gov.
About
VectorVision®
VectorVision®, operating through a wholly-owned
subsidiary of the Company, specializes in the standardization of
contrast sensitivity, glare sensitivity, low contrast acuity, and
ETDRS acuity vision testing. Its patented standardization system
provides the practitioner or researcher the ability to delineate
very small changes in visual capability, either as compared to the
population or from visit to visit. VectorVision®’s CSV-1000 device
is considered the standard of care for clinical trials.
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. 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 and its 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.
Company
Contact: |
Investor Relations
Contact: |
Michael Favish |
Matthew
Abenante |
Chief Executive
Officer |
Porter, LeVay &
Rose, Inc. |
Telephone: (858)
605-9055 x 201 |
Telephone: (212)
564-4700 |
E-mail: mfavish@guardionhealth.com |
E-mail: matthew@plrinvest.com |
The following tables should be read in conjunction with the
footnotes accompanying the condensed consolidated financial
statements contained in the Quarterly Report on Form 10-Q filed
today with the Securities and Exchange Commission.
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