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Guardion Health Sciences Announces Financial Results for the Three Months Ended September 30, 2021

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  • GHSI

$3,000,000+ Sales from Viactiv® Products During the Quarter

HOUSTON, Nov. 10, 2021 (GLOBE NEWSWIRE) -- Guardion Health Sciences, Inc. (Nasdaq: GHSI) (“Guardion” or the “Company”), a clinical nutrition and diagnostics company that develops clinically supported nutrition, medical foods, supplements and medical devices, announced its financial results for the three months and nine months ended September 30, 2021. The Company also provided a corporate update to shareholders.

Financial highlights for the three months ended September 30, 2021 include the following:

  • Total revenue of $3,148,612 for the three months ended September 30, 2021, as compared to $253,188 for the three months ended September 30, 2020, reflecting the first full quarter of operations of the Viactiv brand, which represented approximately 95% of total revenue for the period. The Viactiv line of supplements was acquired by the Company on June 1, 2021.

  • Net loss for the three months ended September 30, 2021 of $(3,014,836) or $(0.12) per share, as compared to a net loss of $(2,143,494) or $(0.15) per share for the three months ended September 30, 2020.

  • Cash and short-term investments balance of $10,558,662 and working capital of $12,896,498 at September 30, 2021.

Additional important events that occurred during the three months ended September 30, 2021 and subsequently include the following:

  • Completed the successful integration of the operations of the Viactiv brand and related systems into the Company’s operations.

  • Relocated the corporate offices from San Diego, California to Houston, Texas.

  • Entered into an agreement to terminate the lease on the Company’s San Diego, California corporate office and main warehouse facility, which was utilized primarily for the Company’s ocular products business. The termination agreement was effective on October 31, 2021 and is expected to reduce overhead costs. Guardion moved its product inventory to an experienced third-party logistics provider.

  • Launched a new and improved corporate and investor website to better engage with the Company’s investors, customers and other stakeholders. The website can be accessed at its current URL, www.guardionhealth.com.

Bret Scholtes, Guardion’s President and Chief Executive Officer, commented, “We are encouraged by our third quarter results, which demonstrated measurable progress towards our goal of building a leading clinical nutrition company. Our revenue growth, driven by the performance of the recently acquired Viactiv product line, represents the highest quarterly sales results in Guardion’s history. We achieved these results despite the challenging supply chain environment, and our management team is actively focusing on supply chain matters given industry-wide constraints. In addition, the Viactiv brand has been completely and successfully integrated into our business, and we remain confident in our ability to drive organic growth through expansion of the Viactiv brand. Our focus is now shifting to ways that we can successfully leverage the established distribution channels and brand awareness of Viactiv to accelerate the growth of the Company into a leader in clinical nutrition.

“Our efforts in the upcoming quarter will be concentrated on growing the market share of our current products, while at the same time expanding upon those attributes that we believe are fundamental to that growth. These include expanding Viactiv’s brand awareness and consumer acceptance through increased marketing and development of direct-to-consumer opportunities; leveraging and expanding our experienced management team; significantly growing our distribution networks and relationships while creating opportunities to develop new approaches and maximizing our product development and launch initiatives. We believe that this leveraging of the established Viactiv brand will be critical to establishing a consistent track record of growth in both revenue and profitability.”

Mr. Scholtes continued, “Over the long-term, Guardion believes that its success will depend on its ability 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. Guardion is committed to bringing compelling products to market that serve a distinct need, under meaningful and differentiated brands that are supported by strong science. We firmly believe that Guardion is now much better positioned to create value for its shareholders as a result of the Viactiv acquisition.”

“Mr. Scholtes concluded, “Finally, as we embark on this important work, we anticipate more opportunities to increase the frequency of shareholder communications to be able to report on achieving measurable and tangible milestones as part of the Company’s overall long-term progress.”

Financial Results

Three Months Ended September 30, 2021 and 2020

Total revenue for the three months ended September 30, 2021 increased to $3,148,612, as compared total revenue for the three months ended September 30, 2020 of $253,188. The significant increase in revenue is due to the Company’s commercialization of its Viactiv products. We achieved these results despite the challenging supply chain environment. Management is actively focusing on supply chain matters in light of industry-wide supply chain constraints. Through September 30, 2021, the Company has not experienced negative impacts to its supply chain, however, the Company cannot make any assurances in future periods.

Operating expenses for the three months ended September 30, 2021 were $4,403,545, as compared to operating expenses for the three months ended September 30, 2020 of $ 2,290,745.

Net loss for the three months ended September 30, 2021 was $(3,014,836), as compared to net loss for the three months ended September 30, 2020 of $(2,143,494).

These results of operations are not comparable to prior periods as we have significantly increased our gross revenues and cost of goods sold with our acquisition and successful integration of Activ.

Nine Months Ended September 30, 2021 and 2020

Total revenue for the nine months ended September 30, 2021 was $4,605,628, as compared total revenue for the nine months ended September 30, 2020 of $1,689,820. The change in overall performance in 2021 as compared to 2020 is attributable to the Company’s acquisition and successful integration of the Viactiv brand and product line on June 1, 2021.

Operating expenses for the nine months ended September 30, 2021 were $12,272,371, as compared to operating expenses for the nine months ended September 30, 2020 of $6,018,137.

Net loss for the nine months ended September 30, 2021 was $(10,224,649) as compared to net loss for the nine months ended September 30, 2020 of $(5,197,567).

These results of operations are not comparable to prior periods as we have significantly increased our gross revenues and cost of goods sold with our acquisition and successful integration of Activ.

About Guardion Health Sciences, Inc.

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 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. 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 implement its business plan, the integration of new management team members, the implementation of new financial, management, accounting and business software systems, the integration of the Viactiv acquisition and possibly additional acquisition targets, the impact of the COVID-19 pandemic 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 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 IR
Scott Arnold
516-222-2560
scotta@coreir.com

Media Relations Contact:
Jules Abraham
Director of Public Relations
CORE IR
917-885-7378
julesa@coreir.com


Guardion Health Sciences, Inc.
Condensed Consolidated Balance Sheets

September 30,

December 31,

2021

2020

(Unaudited)

Assets

Current assets

Cash

$

3,563,854

$

8,518,732

Short-term investments

6,994,808

-

Accounts receivable, net

2,268,623

11,248

Inventories

792,633

384,972

Prepaid expenses

1,246,711

179,931

Total current assets

14,866,629

9,094,883

Property and equipment, net

269,487

285,676

Intangible assets, net

11,553,333

50,000

Goodwill

11,893,134

-

Deposits

1,282

11,751

Right of use asset, net

29,305

418,590

Total assets

$

38,613,170

$

9,860,900

Liabilities and Stockholders’ Equity

Current liabilities

Accounts payable

$

1,182,955

$

608,313

Accrued expenses

473,257

127,637

Operating lease liability – current

313,909

162,845

Payable to former officer

-

148,958

Derivative warrant liability

-

25,978

Total current liabilities

1,970,121

1,073,731

Operating lease liability – long term

-

271,903

Total liabilities

1,970,121

1,345,634

Commitments and contingencies

Stockholders’ Equity

Preferred stock, $0.001 par value; 10,000,000 shares authorized, no shares issued and outstanding

-

-

Common stock, $0.001 par value; 250,000,000 shares authorized; 24,426,993 shares and 15,170,628 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively

24,427

15,171

Additional paid-in capital

100,900,334

62,583,423

Accumulated deficit

(64,281,712

)

(54,083,328

)

Total stockholders’ equity

36,643,049

8,515,266

Total liabilities and stockholders’ equity

$

38,613,170

$

9,860,900


Guardion Health Sciences, Inc.
Condensed Consolidated Statements of Operations (Unaudited)

Three Months Ended
September 30,

Nine Months Ended
September 30,

2021

2020

2021

2020

Revenue

Clinical nutrition

$

3,109,525

$

142,556

$

4,443,113

$

1,446,584

Diagnostics equipment

39,087

110,632

162,515

237,136

Other

-

-

-

6,100

Total revenue

3,148,612

253,188

4,605,628

1,689,820

Cost of goods sold

Clinical nutrition

1,730,318

68,956

2,454,423

764,245

Diagnostics equipment

30,268

45,157

104,417

101,077

Other

-

-

-

2,478

Total cost of goods sold

1,760,586

114,113

2,558,840

867,800

Gross profit

1,388,026

139,075

2,046,788

822,020

Operating expenses

Research and development

16,234

34,034

53,598

109,803

Sales and marketing

777,526

167,213

1,754,321

1,175,126

General and administrative

3,297,725

2,070,998

8,048,713

5,299,696

Transaction costs related to acquisition of Activ Nutritional, LLC

-

-

2,103,680

-

Impairment of right of use asset and lease deposit

280,176

-

280,176

-

Impairment loss on equipment held for sale

-

-

-

30,948

Loss on disposal of fixed assets

31,883

18,500

31,883

18,500

Costs related to resignation of former officer (including the reversal of previously recognized stock compensation expense of $965,295 during the nine months ended September 30, 2020)

-

-

-

(615,936

)

Total operating expenses

4,403,545

2,290,745

12,272,371

6,018,137

Loss from operations

(3,015,518

)

(2,151,670

)

(10,225,583

)

(5,196,117

)

Other income (expense):

Interest expense

-

(3,716)

(14

)

(7,254

)

Interest income

682

-

948

-

Change in fair value of derivative liability

-

11,892

5,804

Total other income (expense)

682

8,176

934

(1,450

)

Net loss

$

(3,014,836

)

$

(2,143,494

)

$

(10,224,649

)

$

(5,197,567

)

Net loss per common share – basic and diluted

$

(0.12

)

$

(0.15

)

$

(0.44

)

$

(0.37

)

Weighted average common shares outstanding – basic and diluted

24,426,993

14,720,087

23,413,055

14,088,395


For the Three Months Ended September 30, 2021

Corporate

Clinical
Nutrition

Diagnostics
Equipment

Total

Revenue

$

-

$

3,109,525

$

39,087

$

3,148,612

Cost of goods sold

-

1,730,318

30,268

1,760,586

Gross profit

1,379,207

8,819

1,388,026

Stock compensation expense

364,448

-

-

364,448

Operating expenses

1,166,837

2,802,886

69,373

4,039,097

Loss from operations

$

(1,531,285

)

$

(1,423,679

)

$

(60,554

)

$

(3,015,518

)



For the Three Months Ended September 30, 2020

Corporate

Clinical
Nutrition

Diagnostics
Equipment

Total

Revenue

$

-

$

142,556

$

110,632

$

253,188

Cost of goods sold

-

68,956

45,157

114,113

Gross profit

-

73,600

65,475

139,075

Stock compensation expense

-

-

-

Operating expenses

1,202,402

1,081,897

6,446

2,290,745

Loss from operations

$

(1,202,402

)

$

(1,008,296

)

$

59,028

$

(2,151,670

)


For the Nine Months Ended September 30, 2021

Corporate

Clinical
Nutrition

Diagnostics
Equipment

Total

Revenue

$

-

$

4,443,112

$

162,516

$

4,605,628

Cost of goods sold

-

2,454,402

104,418

2,558,819

Gross profit

-

1,988,711

58,098

2,046,809

Stock compensation expense

1,095,155

-

-

1,095,155

Operating expenses

5,076,756

5,917,798

182,683

11,177,237

Loss from operations

$

(6,171,911

)

$

(3,929,088

)

$

(124,585

)

$

(10,225,583

)


For the Nine Months Ended September 30, 2020

Corporate

Clinical
Nutrition

Diagnostics
Equipment

Total

Revenue

$

6,100

$

1,446,584

$

237,136

$

1,689,820

Cost of goods sold

2,477

764,246

101,077

867,800

Gross profit

3,623

682,338

136,059

822,020

Stock compensation expense

-

-

Operating expenses

2,655,107

3,146,514

216,516

6,018,137

Loss from operations

$

(2,651,484

)

$

(2,464,176

)

$

(80,457

)

$

(5,196,117

)