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 today that Mr. Bradley
Louis Radoff, who, together with his affiliates, holds
approximately 18.92% of the Company’s issued and outstanding shares
of common stock, has voted in favor of the Company’s proposals to
approve the sale of the Company’s Viactiv brand and business and
the Plan of Liquidation and Dissolution, all as described in the
Company’s definitive proxy statement (the “Proxy Statement”) filed
with the United States Securities and Exchange Commission (the
“SEC”) on April 8, 2024. The Company also announced that, based on
the information currently available to it, if the Company’s
stockholders vote to approve the sale of the Company’s Viactiv
brand and business and the proposed Plan of Liquidation and
Dissolution, it estimates that the total amount distributed to its
stockholders will range from approximately $9.00 and $11.00 per
share of common stock based on the Company’s number of shares of
common stock currently issued and outstanding. The actual amount to
ultimately be distributed is subject to all of the risks,
discussion and disclosures included in the Proxy Statement.
Robert N. Weingarten, the Chairman of the Board
of Directors, stated, “We appreciate the support of Mr. Radoff,
especially since he is the single largest stockholder in the
Company. We also hope that this additional estimate of the expected
per share distribution of cash to our stockholders will assist
stockholders who have not yet voted in their analysis of whether to
support the proposals at our upcoming special meeting of
stockholders. The Board of Directors remains unanimous in our
strong support of all proposals described in our Proxy
Statement.”
The timing and amount of the total distributions
will depend upon a number of factors as described in the Proxy
Statement, including, without limitation, the approval of the
stockholders of both the sale of the Viactiv business and the
Company’s Plan of Liquidation and Dissolution, the closing of the
agreement to sell the Viactiv business on the terms contained in
the Purchase Agreement (defined below) on or before June 30, 2024,
the actual expenses incurred by the Company in connection with
closing of the Purchase Agreement, the timing of the resolution of
matters for which the Company has established a contingency
reserve, the amount to be paid in satisfaction of such
contingencies, the obligations satisfied and provisions made during
the liquidation and winding-up process, the absence of any
unexpected claims against the Company, as well as the Company’s
ability to convert its remaining assets to cash on a timely
basis. The Company has attempted to estimate reasonable
reserves for such liabilities, obligations, expenses and claims
against it. However, those estimates may be inaccurate, which may
cause the amount the Company distributes to its stockholders to be
substantially less than the amount it currently estimates.
Stockholders are advised to carefully read the Proxy Statement.
Agreement to Sell Activ Nutritional, LLC
As previously announced, on January 30, 2024,
the Company entered into an Equity Purchase Agreement (the
“Purchase Agreement”) with Doctor’s Best Inc., a Delaware
corporation, for the sale of all of the outstanding equity
interests of Activ Nutritional, LLC (“Activ”) for aggregate cash
consideration of $17,200,000, of which $1,700,000 was placed in a
third-party escrow account pursuant to the terms of the Purchase
Agreement. Doctor’s Best Inc. is a wholly-owned subsidiary of
Kingdomway USA Corp., the U.S. subsidiary holding company of Xiamen
Kingdomway Group Company (“XKDW”), which is publicly listed on the
Shenzhen Stock Exchange.
The sale of Activ is conditioned upon receiving
majority approval from the Company’s stockholders for this
transaction. This transaction is the result of a broad review of
strategic alternatives by the Company’s Board of Directors over the
past year. The Board of Directors has determined that it is
advisable and in the best interests of the Company and the
Company’s stockholders to approve this transaction.
Potential Dissolution
In the event that the Company’s stockholders
approve the transaction and the transaction closes, the Company
would be left with minimal operations. The Board of Directors has
additionally determined that it is in the best interests of the
Company and its stockholders to approve a voluntary dissolution and
liquidation of the Company pursuant to a Plan of Liquidation and
Dissolution, which would authorize the Company to liquidate and
dissolve in accordance with its terms. However, such decision would
be subject to the Company’s ability to abandon or delay the Plan of
Liquidation and Dissolution in the event that the Board of
Directors determines that another transaction would be in the best
interests of the Company’s stockholders.
Views and Recommendations of the Board
of Directors
If both of these proposals are approved,
stockholders would receive one or more liquidating cash
distributions, which combined are expected to be between $9.00 and
$11.00 per share of common stock as described in this press
release.
If both of these proposals are not approved at
the stockholders’ meeting on May 23, 2024, or any adjournment
thereof, we believe that there is substantial risk to the value of
the Company’s shares.
Accordingly, the Board of Directors unanimously
and strongly recommends that stockholders vote FOR both proposals.
The transaction remains on track for completion by June 30, 2024,
subject to satisfaction or waiver of customary closing
conditions.
If stockholders approve the sale of Activ but do
not approve the Plan of Liquidation and Dissolution, the Company
believes it will be more difficult for the Company to expeditiously
distribute the maximal amount of cash from that sale to our
stockholders, since the Company will need to retain cash to
continue to fund the considerable on-going expenses it has as a
public company and to operate its remaining ocular healthcare
business while the Board of Directors considers strategic
alternatives.
The Company’s common stock is listed and traded
on the Nasdaq Capital Market (“Nasdaq”) under the symbol “GHSI”.
However, if the sale of Activ is approved but the Plan of
Liquidation and Dissolution of the Company is not approved, we
believe that maintaining our listing on Nasdaq will be difficult
and uncertain.
Shares that are not voted are the same as a “NO”
vote for each proposal, so every vote matters, regardless of how
many shares a stockholder may own.
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.
Additional Information and Where to Find
it
In connection with the proposed sale of Activ
and the Plan of Liquidation and Dissolution, the Company filed with
the SEC a Definitive Proxy Statement and other relevant documents,
including a form of proxy card, on April 8, 2024, which were mailed
to the Company’s stockholders of record on April 5, 2024.
Stockholders are urged to read the Definitive Proxy Statement and
any other documents filed with the SEC in connection with the
proposed sale of Activ and the Plan of Liquidation and Dissolution,
or incorporated by reference in the Definitive Proxy Statement
because they contain important information about such proposals.
The Company’s filings with the SEC may be obtained without charge
at www.sec.gov.
Participants in the
Solicitation
The Company and its executive officers,
directors, other members of management, and employees may be
deemed, under SEC rules, to be participants in the solicitation of
proxies from the Company’s stockholders with respect to the
proposed transactions. Information regarding the executive officers
and directors of the Company is set forth in the Company’s
definitive proxy statement.
Forward-Looking Statements
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 approval by the stockholders of the sale of Activ to Doctor’s
Best Inc. and the Plan of Liquidation and Dissolution of the
Company, the successful completion of the sale of Activ to Doctor’s
Best Inc., the successful completion of the Company’s Plan of
Liquidation and Dissolution if approved by the Company’s
stockholders, the use of the proceeds received from the sale, the
Company’s ability to continue to fund or wind-down its operations,
including its ocular healthcare business, subsequent to the sale,
any replacement and integration of new management team members if
needed, the implementation of new financial, management, accounting
and business software systems, supply chain disruptions, key retail
and e-commerce 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.
For more information about Guardion Health Sciences,
Inc., Contact:investors@guardionhealth.comPhone: 1-800
873-5141 Ext 208
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