Guardion Health Sciences, Inc. (“Guardion” or the “Company”)
(Nasdaq: GHSI), a company (i) that has developed medical foods and
medical devices in the ocular health marketplace and (ii) that is
developing condition-specific nutraceuticals that the Company
believes will provide supportive health benefits to consumers,
announced today its financial results for the year ended December
31, 2019. Guardion also provided a corporate update and product
overview.
“Over the course of 2019, we made significant
progress in expanding our business profile by adding synergistic
assets to our growing portfolio. We believe our portfolio contains
an array of market-leading products, and our efforts are focused on
obtaining wider adoption of these unique products by physicians and
their patients, and by consumers,” commented Michael Favish, CEO of
Guardion.
2019/2020 Corporate
Highlights
- Closed $16.2 million in underwritten public offerings during
2019, including the Company’s initial public offering and listing
of its common stock on the Nasdaq Capital Market in April
2019;
- Received proceeds of $3.5 million from the exercise of warrants
during March 2020;
- Selected by Malaysian company, Ho Wah Genting Berhad (“HWGB”),
in February 2020, to leverage Guardion’s NutriGuard business line
to develop an immune-supportive formula designed to provide
immuno-supportive benefits;
- Announced plans in February 2020 to develop a proprietary
immuno-supportive complex, labeled acuMMUNE, designed with the
objective of supporting effective immune function, under its
NutriGuard business line (trademark registration pending);
- In October 2019, received approval from the United States
Patent and Trademark Office for expanded claims for the Company’s
proprietary medical device, the MapcatSF®; and
- In October 2019, announced statistically significant blood
assay study results evaluating Lumega-Z, demonstrating 40 times
higher blood concentration levels of Mesozeaxanthin from Lumega-Z,
as compared to standard AREDS2 over-the-counter gel caps.
“We are pleased with the steady growth in
revenue from our flagship medical food, Lumega-Z. We have also
received significant interest from customers on the recent launch
of the second generation of the VectorVision® CSV-2000 contrast
sensitivity device. We attribute the drop in sales of our legacy
CSV-1000 device in 2019 to physicians delaying their orders until
our second generation CSV-2000 device became available, and we
expect to regain traction in the coming quarters. We believe over
the past year we have set the stage to propel the Company into its
next phase of growth and, importantly, to drive significant value
for our shareholders,” added Mr. Favish.
Product Portfolio Overview
Lumega-Z®: Currently
distributed regulated vision-specific medical food designed to
replenish and restore the macular protective pigment.
- Data presented at the Association
for Research in Vision and Ophthalmology (AVRO) 2019 Annual
Meeting, demonstrated that patients who used Lumega-Z for 12
consecutive months were associated with significant improvement in
Frequency Doubling Technology pericentral function among patients
with severe glaucoma who had previously shown degeneration despite
having had excellent intraocular pressure control.
- Data from a separate study also
presented at ARVO showed that patients with drusen and at risk of
vision loss from macular degeneration treated with Lumega-Z for 6
months showed improvements in vision, as measured by contrast
sensitivity. Similar patients treated with standard
over-the-counter AREDS2 gel caps showed no change.
VectorVision®: Standardization
system specializing in contrast sensitivity, glare sensitivity, low
contrast acuity, and ETDRS acuity vision testing.
·Sales of second generation device, the
CSV-2000, the only computer-generated vision testing instrument
available, commenced in February 2020.
NutriGuard™: High-quality,
condition-specific nutraceuticals, which are designed to supplement
consumers’ diets, allowing the Company to enter the
direct-to-consumer (“DTC”) marketplace.
- Developing an immune-supportive formula, acuMMUNE, designed to
provide immuno-supportive benefits to its users.
- The Company is currently in the process of manufacturing and
packaging acuMMUNE at contract facilities in the United States and
expects that this product will be available for sale beginning in
mid-April 2020.
GlaucoCetin™: First
vision-specific product designed to support and protect the
mitochondrial function of optic nerve cells in patients with
glaucoma.
MapcatSF®: Patented device for
accurate measurement of macular pigment density.
Transcranial Doppler Solutions,
Inc. (“TDSI”): Ultrasound technology to
assess intracerebral blood flow within the brain and eyes to help
detect potential stroke risk in patients and stenosis of ophthalmic
artery; utilized in the identification of early predictors of eye
disease.
Mr. Favish concluded, “The safety and wellness
of our employees, customers and community remains of the upmost
importance to us and we are actively monitoring the evolving
situation with the coronavirus. We remain vigilant and have
implemented multiple risk mitigation strategies to ensure the least
amount of disruption to our business as possible. Although trade
shows have been cancelled or postponed, we have shifted outreach
efforts to conducting webinars and video conferencing, and to other
methods of reaching our target audiences. We are also focusing on
new business opportunities both in the United States and
internationally as a result of the impact of the coronavirus.”
Summary of Financial Results for Fiscal
Year 2019
For the year ended December 31, 2019, revenue
from product sales was $902,937 compared to $942,153 for the year
ended December 31, 2018, resulting in a decrease of $39,216 or 4%.
The decrease is primarily due to the transition of sales and
manufacturing efforts away from our VectorVision CSV-1000 device.
Although the CSV-1000 will continue to be sold, the Company intends
to put a greater emphasis on sales and marketing efforts of the new
CSV-2000 device. The Company commenced sales of the next generation
CSV-2000 device in February 2020. For the year ended December 31,
2019, revenue from medical foods was $444,657 compared to $332,795
for the year ended December 31, 2018, resulting in an increase of
$111,862 or 34%.
For the year ended December 31, 2019, gross
profit was $561,622 compared to $543,974 for the year ended
December 31, 2018, resulting in an increase of $17,648 or 3% due to
pricing and product mix changes. Gross profit represented 62% of
revenues for the year ended December 31, 2019, versus 58% of
revenue for the year ended December 31, 2018.
For the year ended December 31, 2019, the
Company incurred a net loss of $10,878,308, compared to a net loss
of $7,767,407 for the year ended December 31, 2018. The increase in
net loss compared to the prior year period was primarily due to a
non-cash goodwill impairment charge of approximately $1,564,000
related to VectorVision, as well as an increase in non-cash stock
compensation costs of approximately $1,123,000.
The Company had approximately $11.1 million in
cash and cash equivalents at December 31, 2019.
About Guardion Health Sciences, Inc.
Guardion is a specialty health sciences company
(i) that has developed medical foods and medical devices in the
ocular health marketplace and (ii) that is developing
condition-specific nutraceuticals that the Company believes will
provide medicinal and health benefits to consumers. 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 SEC at www.sec.gov.
Guardion Health Sciences,
Inc.
Consolidated Balance Sheets
|
|
December 31, |
|
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets |
|
|
|
|
|
|
|
|
Cash |
|
$ |
11,115,502 |
|
|
$ |
670,948 |
|
Accounts receivable |
|
|
78,337 |
|
|
|
28,203 |
|
Inventories |
|
|
310,941 |
|
|
|
357,997 |
|
Prepaid expenses |
|
|
362,938 |
|
|
|
47,773 |
|
|
|
|
|
|
|
|
|
|
Total current
assets |
|
|
11,867,718 |
|
|
|
1,104,921 |
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
11,751 |
|
|
|
11,751 |
|
Property and equipment,
net |
|
|
374,638 |
|
|
|
274,804 |
|
Right of use asset, net |
|
|
572,714 |
|
|
|
- |
|
Deferred offering costs |
|
|
- |
|
|
|
270,000 |
|
Intangible assets, net |
|
|
50,000 |
|
|
|
456,104 |
|
Goodwill |
|
|
- |
|
|
|
1,563,520 |
|
|
|
|
|
|
|
|
|
|
Total
assets |
|
$ |
12,876,821 |
|
|
$ |
3,681,100 |
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
129,132 |
|
|
$ |
413,925 |
|
Accrued expenses and deferred rent |
|
|
116,211 |
|
|
|
81,412 |
|
Derivative warrant liability |
|
|
13,323 |
|
|
|
- |
|
Lease liability - current |
|
|
151,568 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Total current
liabilities |
|
|
410,234 |
|
|
|
495,337 |
|
|
|
|
|
|
|
|
|
|
Lease liability – long
term |
|
|
434,747 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Total
liabilities |
|
|
844,981 |
|
|
|
495,337 |
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock, $0.001 par
value; 10,000,000 shares authorized; no shares issued and
outstanding at December 31, 2019 and December 31, 2018 |
|
|
- |
|
|
|
- |
|
Common stock, $0.001 par
value; 250,000,000 shares authorized; 74,982,562 and 20,564,328
shares issued and outstanding at December 31, 2019 and December 31,
2018 |
|
|
74,983 |
|
|
|
20,564 |
|
Additional paid-in
capital |
|
|
57,468,528 |
|
|
|
37,798,562 |
|
Accumulated deficit |
|
|
(45,511,671 |
) |
|
|
(34,633,363 |
) |
|
|
|
|
|
|
|
|
|
Total stockholders’
equity |
|
|
12,031,840 |
|
|
|
3,185,763 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders’ equity |
|
$ |
12,876,821 |
|
|
$ |
3,681,100 |
|
Guardion Health Sciences,
Inc.
Consolidated Statements of
Operations
|
|
Years Ended December 31, |
|
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
Revenue |
|
|
|
|
|
|
|
|
Medical foods |
|
$ |
444,657 |
|
|
$ |
332,795 |
|
Medical Devices |
|
|
434,010 |
|
|
|
609,358 |
|
Other |
|
|
24,270 |
|
|
|
- |
|
Total
revenue |
|
|
902,937 |
|
|
|
942,153 |
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold |
|
|
|
|
|
|
|
|
Medical foods |
|
|
155,212 |
|
|
|
161,023 |
|
Medical Devices |
|
|
178,815 |
|
|
|
237,156 |
|
Other |
|
|
7,288 |
|
|
|
- |
|
Total cost of goods
sold |
|
|
341,315 |
|
|
|
398,179 |
|
|
|
|
|
|
|
|
|
|
Gross
profit |
|
|
561,622 |
|
|
|
543,974 |
|
|
|
|
|
|
|
|
|
|
Operating
expenses |
|
|
|
|
|
|
|
|
Research and development |
|
|
194,311 |
|
|
|
231,847 |
|
Sales and marketing |
|
|
1,874,901 |
|
|
|
1,520,862 |
|
General and administrative |
|
|
7,425,827 |
|
|
|
4,934,986 |
|
Goodwill impairment |
|
|
1,563,520 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Total operating
expenses |
|
|
11,058,559 |
|
|
|
6,687,695 |
|
|
|
|
|
|
|
|
|
|
Loss from
operations |
|
|
(10,496,937 |
) |
|
|
(6,143,721 |
) |
|
|
|
|
|
|
|
|
|
Other (income)
expenses: |
|
|
|
|
|
|
|
|
Interest expense |
|
|
258,365 |
|
|
|
2,289 |
|
Finance cost upon issuance of warrants |
|
|
415,955 |
|
|
|
- |
|
Change in fair value of derivative warrants |
|
|
(292,949 |
) |
|
|
- |
|
Costs associated with extension of warrant expiration dates |
|
|
- |
|
|
|
1,621,397 |
|
|
|
|
|
|
|
|
|
|
Total other (income)
expenses |
|
|
381,371 |
|
|
|
1,623,686 |
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
(10,878,308 |
) |
|
|
(7,767,407 |
) |
|
|
|
|
|
|
|
|
|
Net loss per common share –
basic and diluted |
|
$ |
(0.30 |
) |
|
$ |
(0.38 |
) |
Weighted average common shares
outstanding – basic and diluted |
|
|
36,468,081 |
|
|
|
20,188,628 |
|
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 coronavirus (COVID-19) on the Company’s business 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.
Guardion Health Sciences, Inc.
15150 Avenue of Science, Suite 200San Diego, CA 92128Ph
858-605-9055; Fax 858-630-5543www.guardionhealth.com
Investor Contact: Jenene Thomas JTC Team, LLCT:
+1 (833) 475-8247GHSI@jtcir.com
Michael PorterPorter, LeVay & Rose, IncT: +1 (212) 564-4700
mike@plrinvest.com
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