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

Rhea-AI Summary

Guardion Health Sciences (GHSI) reported a significant revenue increase to $3,148,612 for Q3 2021, up from $253,188 in Q3 2020, primarily driven by the acquisition of the Viactiv brand. However, net loss widened to $(3,014,836), compared to $(2,143,494) a year earlier. Operating expenses also rose to $4,403,545, reflecting the costs associated with the Viactiv integration. Total revenue for the nine months ended September 30, 2021, stood at $4,605,628. Guardion is focusing on expanding Viactiv’s market share amid supply chain challenges.

Positive

• Total revenue for Q3 2021 increased to $3,148,612, a significant growth compared to Q3 2020's $253,188.
• Successful integration of the Viactiv brand into operations.
• Balance of cash and short-term investments at $10,558,662, providing financial stability.

Negative

• Net loss increased to $(3,014,836) for Q3 2021, compared to $(2,143,494) in Q3 2020.
• Operating expenses rose to $4,403,545, indicating higher costs post-acquisition.

$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	)

FAQ

What are the Q3 2021 financial results for GHSI?

For Q3 2021, GHSI reported total revenue of $3,148,612 and a net loss of $(3,014,836).

How much revenue did GHSI generate in the nine months ended September 30, 2021?

GHSI generated total revenue of $4,605,628 for the nine months ended September 30, 2021.

What drove the revenue increase for GHSI in Q3 2021?

The revenue increase was primarily attributed to the successful acquisition and integration of the Viactiv brand.

What are the operating expenses for GHSI in Q3 2021?

Operating expenses for Q3 2021 were $4,403,545.

How has GHSI's net loss changed from Q3 2020 to Q3 2021?

GHSI's net loss increased from $(2,143,494) in Q3 2020 to $(3,014,836) in Q3 2021.