Healthy Extracts Reports Record Third Quarter 2022, Net Revenue up 32% with Strong Subscription-Based Revenue Growth

Rhea-AI Summary

Healthy Extracts Inc. (OTCQB: HYEX) reported a 32% increase in Q3 2022 net revenue, totaling $500,000, and a 40% rise in gross profit to $431,000, leading to a gross margin of 86.3%. Operating expenses decreased 30% to $486,000. Subscription customers surged 82% on Amazon and 54% for direct sales. For the first nine months, revenue rose 80% to $1.4 million, with net loss narrowing to $1.0 million. Management remains optimistic about future growth, emphasizing recent product launches and strategic retail partnerships.

Positive

• Net revenue increased 32% in Q3 2022, reaching $500,000.
• Gross profit rose 40% to $431,000, with a gross margin of 86.3%.
• Operating expenses decreased 30% to $486,000.
• Subscription customers increased 82% on Amazon, enhancing recurring revenue.
• First nine months revenue grew 80% to $1.4 million.

Negative

• Gross margin decreased from 81.4% to 71.9% in the first nine months of 2022.
• Net loss for Q3 was $170,000, despite improvements compared to prior year.

LAS VEGAS, Nov. 09, 2022 (GLOBE NEWSWIRE) -- Healthy Extracts Inc. (OTCQB: HYEX), a leading innovator of clinically proven plant-based products for heart and brain health, reported results for the third quarter ended September 30, 2022. All comparisons are to the same year-ago period unless otherwise noted.

Q3 2022 Financial Highlights

• Net revenue totaled a record $500,000, up 32%.
• Gross profit totaled $431,000, up 40%.
• Gross margin was 86.3% as compared to 81.0% in the third quarter of 2021.
• Operating expenses decreased 30% to $486,000.
• Subscription customers at September 30, 2022 increased 82% on Amazon and 54% on direct-to-consumer versus September 30, 2021. The growth in subscription revenue helps lower customer acquisition costs and provides greater visibility into future revenue.
  

First Nine Months 2022 Financial Highlights

• Net revenue totaled $1.4 million, up 80%.
• Gross profit totaled $1.0 million, up 59%.
• Gross margin was 71.9% as compared to 81.4% in the first nine months of 2021. The decrease in gross margin was due to a shift in product mix to lower margin revenue.
• Operating expenses decreased 7% to $1.7 million.

Q3 Operational Highlights

• Launched premium Citrus Bergamot SuperFruit™ heart health supplement, BergaMet PRO+™, on Fullscript.com, the nation’s leading care delivery platform for integrative medicine.
• Introduced Whitney Johns’ premium heart health supplement, Citrus Bergamot for Women, now available exclusively on Amazon.com.
• Shipped second order to Natural Grocers®, the nation's largest family-operated organic and natural grocery retailer. Launched in the second quarter of this year, National Grocers represents the company’s first strategic entrance of the retail marketplace.
• Launched a new clinical study investigating UBN ACTIVATE’s™ effect on golfers’ energy, focus and scores.

Management Commentary

“Thanks to our tremendous product lineup, in Q3 we overcame many supply chain challenges, including increased freight costs, as well as inflation pressures, to generate another record quarter,” commented Duke Pitts, president of Healthy Extracts. “We also improved our gross margins, which were already exceptionally high, while decreasing expenses. As a result, our cash flow improved to nearly neutral, which contrasts strongly to other companies in our space.

“We also strengthened our recurring revenue stream with strong subscriber growth, both direct-to-consumer and through Amazon. This growth demonstrates the increasing consumer long-term adoption of our products, particularly our clinically proven heart health supplements.

“Amazon has developed into a major part of our multi-channel approach, particularly with its ‘Subscribe and Save’ option that increased by 82% over the past year. Our recent entrance of the traditional retail marketplace also strengthened with a second large order from Natural Grocers, the nation's largest family-operated organic and natural grocery retailer.

“Also driving growth during the quarter was the launch of our premium Citrus Bergamot SuperFruit™ heart health supplement, BergaMet PRO+, on Fullscript.com. Fullscript.com has greatly expanded our reach to thousands of healthcare practitioners and their millions of patients across the country.

“BergaMet PRO+ on Fullscript.com also provides strong validation of its clinically proven benefits for heart health. We continue to lead the competition with our BergaMet PRO+ having 47% BPF Gold potency as compared to our closest competitor at only 38% BPF.

“To drive continued sales growth and leverage our growing customer base, we are planning to expand our product portfolio to include supplements that support gut health as well as add additional gel-pack product formats. This will include a new Whitney Johns gut health gel pack as well as a new gel pack option for our Ultimate Brain Nutrients RELIEF™. RELIEF is our proprietary, patent-pending natural formulation that provides relief from symptoms often associated with migraine headaches.

“We also plan to launch a number of proprietary-formulated caffeine-based gel products. The gel-pack provides a super-convenient way to take our products on-the-go with no need to take or mix with water or juice. We plan to launch these new gel-pack products before the end of the year.

“We also continue to evaluate a number of attractive acquisition opportunities that could grow our product portfolio and benefit from our marketing strength and multi-channel distribution.

“For the remainder of the year, we will continue to focus on expanding our sales channels and portfolio of proprietary, clinically-proven natural formulations for heart and brain health. Given our momentum coming out of the third quarter, we believe Healthy Extracts remains on track for another record year, with 2023 looking even better.”

Q3 Financial Summary

Net revenue in the third quarter of 2022 increased 32% to $500,000 from $380,000 in the same year-ago quarter.

Gross profit totaled $431,000 or 86.3% of net revenue as compared to $308,000 or 81.0% of net revenue in the same year-ago quarter.

Operating expenses decreased to $486,000 compared to $693,000 in the same year-ago quarter. The decrease in operating expenses was due to decreased general and administrative expenses.

Net loss totaled $170,000 or $(0.00) per basic and diluted share compared to a net loss of $672,000 or $(0.00) per basic and diluted share in the same year-ago period. The third quarter of 2022 included a change in fair value on derivative of $104,000, a non-cash charge. After giving effect to the change in fair value of the derivative as well as interest expense (net of interest income) of $11,000, on a proforma basis net loss totaled $54,000.

Cash totaled $74,000 as of September 30, 2022, as compared to $159,000 as of June 30, 2022.

First Nine Months 2022 Financial Summary

Net revenue in the first nine months of 2022 increased 80% to $1.4 million from $794,000 in the same year-ago period.

Gross profit totaled $1.0 million or 71.9% of net revenue as compared to $647,000 or 81.4% of net revenue in the same year-ago period.

Operating expenses decreased 7% to $1.7 million compared to $1.9 million in the same year-ago period. The decrease in operating expenses was due to increased general and administrative expenses.

Net loss totaled $1.0 million or $(0.00) per basic and diluted share compared to a net loss of $2.5 million or $(0.01) per basic and diluted share in the same year-ago period. The first nine months of 2022 included a change in fair value on derivative of $246,000. After giving effect to the change in fair value of the derivative as well as interest expense (net of interest income $69,000, on a proforma basis net loss totaled $712,000.

About Healthy Extracts “Live Life Young Again”
Healthy Extracts Inc. is a platform for developing or acquiring science-forward, clinically proven, plant-based proprietary products in select high-growth categories within the multibillion-dollar nutraceuticals market.

The company’s subsidiaries, BergametNA™ and Ultimate Brain Nutrients™ (UBN), offer nutraceutical natural heart and brain health supplements. This includes the only heart health supplement containing Citrus Bergamot SuperFruit™. This superfruit is known to have the highest quality and concentration of polyphenols and flavonoids, and with healthy heart benefits backed by more than 17 clinical studies.

UBN KETONOMICS® proprietary formulations have been clinically shown to support brain health, including memory, cognition, focus and neuro-energy. UBN is pursuing intellectual property license opportunities for monetizing its IP portfolio of multiple issued and pending patents.

For more information visit: healthyextractsinc.com, bergametna.com or tryubn.com.

Forward-Looking Statements and Safe Harbor Notice

All statements other than statements of historical facts included in this press release are "forward-looking statements" (as defined in the Private Securities Litigation Reform Act of 1995). Such forward-looking statements include our expectations and those statements that use forward-looking words such as "projected," "expect," "possibility" and "anticipate." The achievement or success of the matters covered by such forward-looking statements involve significant risks, uncertainties and assumptions. Actual results could differ materially from current projections or implied results. Investors should read the risk factors set forth in the Company's Annual Report on Form 10-K filed with the SEC on April 1, 2022, and future periodic reports filed with the SEC. All of the Company's forward-looking statements are expressly qualified by all such risk factors and other cautionary statements.

The Company cautions that statements and assumptions made in this news release constitute forward-looking statements and make no guarantee of future performance. Forward-looking statements are based on estimates and opinions of management at the time statements are made. The information set forth herein speaks only as of the date hereof. The Company and its management undertake no obligation to revise these statements following the date of this news release.

Food and Drug Administration Disclosure

The product and formulation featured in this release is not for use by or sale to persons under the age of 12. This product should be used only as directed on the label. Consult with a physician before use if you have a serious medical condition or use prescription medications. A doctor’s advice should be sought before using this and any supplemental dietary product. These statements have not been evaluated by the FDA. This product is not intended to diagnose, treat, cure or prevent any disease.

BergametNA™, Ultimate Brain Nutrients™, UBN™, Citrus Bergamot SuperFruit™ and F4T® are registered trademarks of Healthy Extracts Inc.™

Healthy Extracts Company Contact
Duke Pitts, President
Healthy Extracts Inc.
Tel (720) 463-1004
Email contact

Investor & Media Contact
Ronald Both or Grant Stude
CMA Investor & Media Relations
Tel (949) 432-7566
Email contact

Media Contact:
Tim Randall
CMA
Tel (949) 432-7572
Email Contact

HEALTHY EXTRACTS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDING SEPTEMBER 30,
(Unaudited)
		FOR THE 3 MONTHS ENDING								FOR THE 9 MONTHS ENDING
		SEPTEMBER 30,								SEPTEMBER 30,
			2022				2021				2022				2021
REVENUE
Gross revenue		$	573,967			$	447,986			$	1,668,105			$	903,142
Less selling fees			(74,315	)			(68,111	)			(235,255	)			(108,949	)
Net revenue			499,653				379,875				1,432,850				794,193
COST OF REVENUE
Cost of goods sold			68,551				72,250				382,038				147,456
Written off inventory			-				-				20,750				-
Total cost of revenue			68,551				72,250				402,788				147,456
GROSS PROFIT			431,102				307,625				1,030,062				646,737
OPERATING EXPENSES
General and administrative			485,568				692,940				1,744,326				1,873,858
Total operating expenses			485,568				692,940				1,744,326				1,873,858
OTHER INCOME (EXPENSE)
Interest expense, net of interest income			(11,336	)			(19,242	)			(68,657	)			(48,598	)
Change in fair value on derivative			(104,421	)			(307,746	)			(246,260	)			(1,287,971	)
Loss on extinguishment of debt			-				-				-				-
SBA loan forgiveness			-				39,833				-				39,833
Gain on sale of asset			-				-				2,643				-
Total other income (expense)			(115,757	)			(287,155	)			(312,274	)			(1,296,736	)
Net gain/(loss) before income tax provision			(170,223	)			(672,470	)			(1,026,538	)			(2,523,857	)
NET GAIN/(LOSS)		$	(170,223	)		$	(672,470	)		$	(1,026,538	)		$	(2,523,857	)
Loss per share - basic and diluted		$	(0.00	)		$	(0.00	)		$	(0.00	)		$	(0.01	)
Weighted average number of shares outstanding - basic and diluted			341,619,198				316,650,804				342,514,810				317,363,964

HEALTHY EXTRACTS, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
				SEPTEMBER 30,				DECEMBER 31,
ASSETS					2022				2021
CURRENT ASSETS
Cash				$	73,884			$	222,098
Accounts receivable					100,755				133,340
Inventory					1,866,442				1,957,966
Total current assets					2,041,081				2,313,404
Fixed assets, net of accumulated depreciation of $49,547 and $45,944, respectively					6,050				1,035
Patents/Trademarks					521,881				521,881
Deposit					16,890				-
Goodwill					193,260				193,260
Total other assets					738,080				716,175
TOTAL ASSETS				$	2,779,161			$	3,029,579
LIABILITIES AND STOCKHOLDERS' DEFICIT
LIABILITIES
Accounts payable				$	114,066			$	37,267
Accrued liabilities					6,934				59,264
Notes payable					93,174				-
Notes payable - related party					866				170,866
Convertible debt, net of discount of $0.00 and $0.00, respectively					360,750				171,750
Convertible debt - related party, net of discount of $0.00 and $0.00, respectively					-				-
Accrued interest payable					29,671				13,050
Accrued interest payable - related party					-				14,118
Derivative liabilities					338,787				92,527
Total current and total liabilities					944,248				558,841
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock, $0.001 par value, 75,000,000 shares authorized, none and none shares issued and outstanding, respectively					-				-
Common stock, $0.001 par value, 2,500,000,000 shares authorized, 345,172,442 and 338,887,410 shares issued and outstanding, respectively					345,172				338,384
Additional paid-in capital					17,459,899				17,075,974
Accumulated deficit					(15,970,158	)			(14,943,620	)
Total stockholders' equity (deficit)					1,834,913				2,470,738
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)				$	2,779,161			$	3,029,579

 

FAQ

What were the Q3 2022 financial results for Healthy Extracts (HYEX)?

Healthy Extracts (HYEX) reported Q3 2022 net revenue of $500,000, a 32% increase year-over-year.

How much did Healthy Extracts' gross profit increase in Q3 2022?

Gross profit for Q3 2022 increased by 40% to $431,000.

What was the subscription growth on Amazon for Healthy Extracts (HYEX)?

Subscription customers on Amazon grew by 82% year-over-year as of September 30, 2022.

What was the net loss for Healthy Extracts in Q3 2022?

The net loss for Q3 2022 amounted to $170,000.

How did operating expenses change in the third quarter of 2022 for HYEX?

Operating expenses decreased by 30% to $486,000 in Q3 2022.