LAFAYETTE, Louisiana, Nov. 19, 2019 /PRNewswire/ -- InvestorsHub NewsWire -- RedHawk Holdings Corp. (OTC: SNDD) ("RedHawk" or the "Company") a diversified holding company engaged in sales and distribution of medical devices, branded generic pharmaceutical drugs, commercial real estate investment and leasing, point of entry full-body security systems, and specialized financial services, announced today financial results for its first quarter of fiscal 2020, which ended September 30, 2019.
RedHawk reported a net loss from operations of $194,685 on revenues of $65,098 ($50,558 net of introductory discounts) for the first quarter ended September 30, 2019, compared to a net loss from operations of $108,014 on revenues of $46,668 for the comparable first quarter ended September 30, 2018. The net operating loss for the quarter ended September 30, 2019 was principally attributable to approximately $151,000 of certain start-up costs and non-recurring expenses costs associated with the launch and continuing development of the Company's line of Sharps and Needle Destruction Devices - SANDD mini™, SANDD Pro™ and the newly released SANDD-HP™ (collectively the "SANDD™ Products").
The Company previously announced that it had successfully completed a limited marketing campaign into the Texas Independent School Systems during the first quarter ended September 30, 2019, designed to evaluate the anticipated interest in, and the potential sales and profitability of, its DD mini™ needle incineration unit. Revenue for the first quarter of fiscal 2020 included Texas marketing campaign sales of the Company's DD mini™ of $55,348 ($40,808 net of introductory discounts). The gross profit margin on these sales of the Company's DD mini™ was 82.2% (75.9% after introductory discounts). There were no branded generic pharmaceutical sales for the first quarter ended September 30, 2019.
Sales for the first quarter ended September 30, 2018 included $36,918 in sales of the Company's branded generic pharmaceutical products with a gross profit margin of only 27.0%. Sales of the Company's SANDD mini™ were nominal during the first quarter ended September 30, 2018.
Commenting on the first quarter results, G. Darcy Klug, Chairman and Interim Chief Executive Officer said: "During the 2019 fiscal year, we shifted our revenue focus away from lower margin branded generic pharmaceutical sales in the United Kingdom and started deploying our available capital to the development and launch of our line of higher margin needle incineration medical devices. While we may return our focus on branded generic pharmaceuticals sales in the future, the results of our limited marketing campaign confirmed our decision to temporarily deploy our available working capital to the development and launch of our complete line of SANDD™ Products. As such, we are finalizing the development of the SANDD Pro™ and executing on our plan to build a network of independent marketing representatives in order to geographically expand our marketing efforts into Texas, Southern California, Missouri and along the Gulf Coast."
"We are thrilled with the profit margins on the initial sales of the SANDD mini™. The launch and continue development of the SANDD™ Products did result in significant start-up and non-recurring costs during the first quarter," continued Mr. Klug. "In addition to the introductory discounts of $15,000, we incurred $151,000 of start-up and development costs including $24,000 for continuing research and development, $25,000 for the limited marketing campaign in Texas and the implementation of ISO 13485 quality control compliance, $29,000 for start-up business and website development costs, $39,000 for marketing and investor relations advisory services and $34,000 for non-recurring professional services."
Other recent announcements:
Today, RedHawk also announced that it has completed testing, and is now accepting orders, for its new SANDD-HP™. This unit operates with both AC and/or DC power and is designed specifically for healthcare professionals for use in both a clinical/office or portable setting. The major electronic components of the SANDD-HP™ will be manufactured in the United States.
RedHawk also announced today that it has started video production of its social media campaign with Dr. Drew Pinsky (commonly known as "Dr. Drew"). In July 2019, the Company named Dr. Drew as its exclusive spokesperson for the SANDD™ Products and any related products and/or accessories. The social media campaign will include, among other things, product video testimonials, infomercials, direct response television commercials, audiovisual digital platforms, search engine marketing, social media public relations, and e-mails to existing customers of RedHawk or third party agencies.
In September 2019, the Company announced that it has retained PCG Advisory Inc., a leading investor relations and digital strategies firm, to serve as an advisor for investor relations and strategic communications.
For additional information regarding the Company's quarterly results of operation, see the Company's Form 10-Q for the first quarter ended September 30, 2019, as filed with the Securities and Exchange Commission and posted on the Company's website.
About RedHawk Holdings Corp.
RedHawk Holdings Corp., formerly Independence Energy Corp., is a diversified holding company which, through its subsidiaries, is engaged in sales and distribution of medical devices, sales of branded generic pharmaceutical drugs, commercial real estate investment and leasing, sales of point of entry full-body security systems, and specialized financial services. Through its medical products business unit, the Company sellsthe Sharps and Needle Destruction Device (SANDD™), WoundClot Surgical - Advanced Bleeding Control, and the Carotid Artery Digital Non-Contact Thermometer. Through our United Kingdom based subsidiary, we manufacture and market branded generic pharmaceuticals. RedHawk Energy holds the exclusive U.S. manufacturing and distribution rights for the Centri Controlled Entry System, a unique, closed cabinet, nominal dose transmission full-body x-ray scanner. For more information, visit www.redhawkholdingscorp.com
Cautionary Statement Regarding Forward-Looking Statements
This release may contain forward-looking statements. Forward-looking statements are all statements other than statements of historical fact. Statements contained in this release that are not historical facts may be deemed to be forward-looking statements. The words "anticipate," "may," "can," "plans," "believes," "estimates," "expects," "projects," "targets," "intends," "likely," "will," "should," "to be," "potential" and any similar expressions are intended to identify those assertions as forward-looking statements.
Investors are cautioned that forward-looking statements are inherently uncertain. Actual performance and results may differ materially from that projected or suggested herein due to certain risks and uncertainties. In evaluating forward-looking statements, you should consider the various factors which may cause actual results to differ materially from any forward-looking statements including those listed in the "Risk Factors" section of our latest 10-K report. Further, the Company may make changes to its business plans that could or will affect its results. Investors are cautioned that the Company will undertake no obligation to update any forward-looking statements.
G. Darcy Klug, Chairman, CEO and CFO
Stephanie Prince, Managing Director