Guardion Health Sciences, Inc. (Nasdaq: GHSI) (“Guardion” or the
“Company”), a clinical nutrition company that offers a portfolio of
science-based, clinically-supported products designed to support
the health needs of consumers, healthcare professionals and
providers and their patients, announced its financial results for
the three months and six months ended June 30, 2023. The Company
also provided a corporate update to stockholders.
Financial highlights for the three months and
six months ended June 30, 2023 include the following (all common
share and per share amounts shown below have been adjusted to
reflect the 1-for-50 reverse stock split effective January 6,
2023):
-
Total revenue was $2,789,817 for the three months ended June 30,
2023, as compared to $3,275,213 for the three months ended June 30,
2022, a decrease of $485,396 or 14.8%. The decrease in total
revenue was driven by reduced sales of the
Viactiv® product line, which accounted for
approximately 97% and 97% of the Company’s total revenue for the
three months ended June 30, 2023 and 2022, respectively. Shipments
of Viactiv® to retail customers were delayed in
the month of June 2023 due to the short-term impact of a
third-party warehouse expansion, which was fully resolved in July
2023. eCommerce logistics were unaffected by this issue. Amazon net
sales for the three months ended June 30, 2023, increased by
approximately 334.3% as compared to the three months ended June 30,
2022 and by approximately 124.3% as compared to the three months
ended March 31, 2023.
-
Gross profit was $1,249,268 for the three months ended June 30,
2023, as compared to $1,399,544 for the three months ended June 30,
2022, a decrease of $150,276 or 10.7%. The reduction in gross
profit was primarily attributable to the decrease in sales from the
Viactiv® product line.
-
Gross margin for the three months ended June 30, 2023 was 44.8%, as
compared to 42.7% for the three months ended June 30, 2022, an
increase of 4.9%, which was driven primarily by an inventory
reserve recorded in 2022.
-
Total operating expenses for the three months ended June 30, 2023
were $2,261,914, as compared to $3,111,122 for the three months
ended June 30, 2022, a decrease of $849,208 or 27.3%. The variance
was attributable to a combination of factors, including the
amortization of intangible assets in 2022 that was no longer
occurring in 2023 and reduced payroll expense and lower executive
stock compensation expense.
-
Loss from operations for the three months ended June 30, 2023
decreased to $(1,012,646), as compared to $(1,711,578) for the
three months ended June 30, 2022, a reduction of $698,932 or
40.8%.
-
As a result of the aforementioned factors, and also including the
non-cash gain (loss) from the change in fair value of the warrant
derivative liability of $(255,300) and $5,357,600 for the three
months ended June 30, 2023 and 2022, respectively, net loss was
$(1,172,411) for the three months ended June 30, 2023, as compared
to net income of $3,655,637 for the three months ended June 30,
2022.
-
Basic and diluted net loss for the three months ended June 30, 2023
was $(0.93) per share, as compared to basic and diluted net income
of $2.97 per share for the three months ended June 30, 2022, based
on 1,267,340 weighted average common shares outstanding in 2023 and
1,231,063 weighted average common shares outstanding in 2022.
Financial highlights for the six months ended
June 30, 2023 include the following:
-
Total revenue was $5,975,506 for the six months ended June 30,
2023, as compared to $5,659,832 for the six months ended June 30,
2022, an increase of $315,674 or 5.6%. The increase in total
revenue was driven by increased sales of the
Viactiv® product line, which accounted for
approximately 97% and 96% of the Company’s total revenue for the
six months ended June 30, 2023 and 2022, respectively. Shipments of
Viactiv® to retail customers were delayed in the
month of June 2023 due to the short-term impact of a third-party
warehouse expansion, which was fully resolved in July 2023.
eCommerce logistics were unaffected by this issue. Amazon net sales
for the six months ended June 30, 2023 increased by approximately
647.8% as compared to the six months ended June 30, 2022.
-
Gross profit was $2,584,570 for the six months ended June 30, 2023,
as compared to $2,496,001 for the six months ended June 30, 2022,
an increase of $88,569 or 3.5%. The increase in gross profit was
primarily attributable to the increase in sales from the
Viactiv® product line.
-
Gross margin for the six months ended June 30, 2023 was 43.3%, as
compared to 44.1% for the six months ended June 30, 2022, a
decrease of 0.8%, which was driven primarily by higher short-term
fulfillment costs to accelerate initial product setup on Amazon in
the three months ended March 31, 2023. Amazon fulfillment costs
were lower for the three months ended June 30, 2023, as compared to
the three months ended March 31, 2023.
-
Total operating expenses for the six months ended June 30, 2023
were $5,061,223, as compared to $6,827,627 for the six months ended
June 30, 2022, a decrease of $1,766,404 or 25.9%. The variance was
attributable to a combination of factors, including including the
amortization of intangible assets in 2022, reduced payroll expense,
insurance, and professional fees and consulting fees.
-
Loss from operations for the six months ended June 30, 2023
decreased to $(2,476,653), as compared to $(4,331,626) for the six
months ended June 30, 2022, a reduction of $1,854,973 or
42.8%.
-
As a result of the aforementioned factors, and also including the
non-cash gain from the change in fair value of the warrant
derivative liability of $1,642,800 and $2,675,100 for the six
months ended June 30, 2023 and 2022, respectively, net loss was
$(639,320) for the six months ended June 30, 2023, as compared to a
net loss of $(1,645,350) for the six months ended June 30,
2022.
-
Basic and diluted net loss for the six months ended June 30, 2023
was $(0.50) per share, as compared to basic and diluted net loss of
$(1.63) per share for the six months ended June 30, 2022, based on
1,267,340 weighted average common shares outstanding in 2023 and
1,009,243 weighted average common shares outstanding in 2022.
-
Cash used in operations for the six months ended June 30, 2023 was
$2,285,712, as compared to $4,800,765 for the six months ended June
30, 2022.
-
As of June 30, 2023, the Company had unrestricted cash and cash
equivalents of $8,365,987 and net working capital (excluding the
current portion of the warrant derivative liability) of
$11,993,202.
Additional significant events that occurred
during the three months and six months ended June 30, 2023 and
subsequently included the following:
-
Alantra LLC was retained as the Company’s exclusive financial
advisor to implement a strategic review to solicit and evaluate
alternatives to maximize stockholder value in the near-term, which
review is on-going.
-
Jan Hall was appointed President and CEO, effective June 19, 2023,
replacing Bret Scholtes.
-
Katie Cox was appointed as Chief Accounting Officer, effective July
25, 2023, replacing Jeffrey Benjamin.
Jan Hall, Guardion’s recently-appointed
President and Chief Executive Officer, commented, “I am truly
excited to be able to join the Guardion team as its President and
Chief Executive Officer. Based on my initial review, I believe that
the Viactiv business has the potential to grow by focusing on
powerful brand messaging with science-based claims that rank
highest for shoppers’ purchase intent. We believe that we can
deliver this messaging with an emotional hook that connects with
the values, needs and aspirations of our target consumers. We
recently implemented a Bold Age advertising campaign for the
Viactiv calcium chews that has already seen positive results, as
compared with industry metrics and prior Viactiv campaigns. As we
learn more from in-market performance, we will continue to refine
and optimize the creative aspects of our marketing campaigns.
Effective advertising, combined with targeted marketing
initiatives, product innovations in existing and new product
segments, plus expanded retail and online distribution, will be the
engine of future growth to make Viactiv a broad-based destination
health and wellness brand with a foundation in clinically supported
efficacy.”
“We have seen the initial results of
management’s continuing efforts to improve operating performance
during the first half of 2023, reflected in improved operating
margins in the second quarter of 2023 and a reduced cash burn. The
focus on efficiency will be ongoing in the second half of the
year.”
“We continue to believe that the Company remains
undervalued in the public market, specifically with regard to the
clinical nutrition platform and the brand that we are building. Our
work with Alantra, LLC (“Alantra”), our exclusive financial
advisor, is underway as we conduct our strategic review to solicit
and evaluate alternatives to maximize stockholder value in the
near-term, which could range from a sale of the Company, sale of
the Viactiv brand, merger, asset acquisition, reverse acquisition,
or other potential strategic transaction. As this process evolves,
we anticipate providing updates to our stockholders as developments
warrant.”
“In the meantime, we believe our market position
and the extendability of the Viactiv brand, combined with our
current operating business strategy, provide us with a viable
platform from which to leverage our resources to continue our
efforts to grow operations, improve financial performance and
maximize stockholder value,” concluded Ms. Hall.
Financial Results
Additional information with respect to the
Company’s business, operations and financial condition as of and
for the three months and six months ended June 30, 2023 is
contained in the Company’s Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 2023, which has been filed with the
U.S. Securities and Exchange Commission (the “SEC”) at
www.sec.gov.
About Guardion Health Sciences,
Inc.
Guardion Health Sciences, Inc. (Nasdaq: GHSI),
is a clinical nutrition company that offers a portfolio of
science-based, clinically supported products designed to support
the health needs of consumers, healthcare professionals and
providers and their patients. Information and risk factors with
respect to Guardion and its business may be obtained in the
Company’s filings with 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. These
forward-looking statements contain information about our
expectations, beliefs, plans or intentions regarding our product
development and commercialization efforts, research and development
efforts, business, financial condition, results of operations,
strategies or prospects, and other similar matters. Statements
preceded by, followed by or that otherwise include the words
“believes,” “expects,” “anticipates,” “intends,” “projects,”
“estimates,” “plans,” “hopes” 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 are based on management’s
current expectations and assumptions about future events, which are
inherently subject to uncertainties, risks and changes in
circumstances that are difficult to predict, and 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 fund its
business plan, the impact of the Company’s exploration of strategic
alternatives, any replacement and integration of new management
team members, the implementation of new financial, management,
accounting and business software systems, the identification and
integration of possible acquisition targets and suitors, the impact
of the Covid-19 pandemic, supply chain disruptions, inflation and a
potential recession on the Company’s business, operations and the
economy in general, the Company’s ability to successfully develop
and commercialize its proprietary products and technologies, and
the Company’s ability to maintain compliance with Nasdaq’s
continued listing requirements.
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
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