Financial Performance - Viactiv generated net revenues of approximately $3,091,000 for the three months ended March 31, 2023, accounting for 97% of total revenues[92] - Sales increased to $3,185,689 for the three months ended March 31, 2023, attributed to improved inventory levels and targeted retail price increases[99] - For the three months ended March 31, 2023, revenue from product sales was $3,185,689, an increase of $801,070 or 33.6% compared to $2,384,619 for the same period in 2022[130] - The company reported a net income of $533,091 for the three months ended March 31, 2023, compared to a net loss of $5,300,987 in the same period of 2022, marking an improvement of 894.4%[128] - Loss from operations improved to $(1,464,007) for the three months ended March 31, 2023, a decrease of $1,156,041 or 44% compared to $(2,620,048) in the same period of 2022[135] - The change in fair value of warrant derivative liabilities resulted in a gain of $1,898,100 for the three months ended March 31, 2023, compared to a loss of $2,682,500 in the same period of 2022, an increase of approximately $4,580,600[136] - Net income for the three months ended March 31, 2023, was $533,091, a significant improvement from a net loss of $(5,300,987) in the same period of 2022[137] Cost and Expenses - Cost of goods sold for the three months ended March 31, 2023, was $1,850,387, reflecting an increase of $562,225 or 43.7% from $1,288,162 in the prior year[131] - Gross profit for the three months ended March 31, 2023, was $1,335,302, representing a 21.8% increase from $1,096,457 in the same period of 2022[128] - Gross profit percentage decreased to 41.9% for the three months ended March 31, 2023, down from 45.9% in the same period of 2022, primarily due to increased retail customer trade promotions[132] - Operating expenses decreased by 24.7% to $2,799,309 for the three months ended March 31, 2023, down from $3,716,505 in the prior year[128] - Sales and marketing expenses decreased by $69,790 or 11% to $598,655 for the three months ended March 31, 2023, mainly due to reduced expenditures on the Viactiv product line[133] - General and administrative expenses decreased by $903,249 or 30% to $2,137,920 for the three months ended March 31, 2023, driven by reductions in various expense categories[134] - Research and development expenses surged by 837.6% to $62,734 for the three months ended March 31, 2023, compared to $6,691 in the same period of 2022[128] Product Development and Strategy - The company launched the Omega Boost Gel Bites product in 2022, which contains 1,200 mg of Omega-3 and is designed for total body support[95] - The company aims to strengthen its clinical nutrition strategy by advancing clinical evidence and increasing product awareness within the healthcare community[101] - The company plans to enhance its product strategy by developing new products and improving its brand strategy through better marketing and social media engagement[129] - The company has taken steps to strengthen its corporate foundation, including the acquisition of Viactiv and the launch of new products[124] Market Position and Strategic Initiatives - The acquisition of Activ Nutritional in June 2021 has significantly changed the company's financial position and market profile[90] - The company is evaluating strategic alternatives to maximize stockholder value, including potential sales or mergers[102] - A reverse stock split of 1-for-50 was approved to regain compliance with Nasdaq's minimum bid price requirement[108] Cash Flow and Working Capital - Cash and cash equivalents as of March 31, 2023, totaled $8,774,626, with working capital of $12,975,691[138] - Net cash used in operating activities decreased to $1,879,210 for the three months ended March 31, 2023, from $2,226,473 in the same period of 2022, a reduction of $347,263[142] - Net cash used in financing activities was $5,250,000 for the three months ended March 31, 2023, used entirely to repay holders of Preferred Stock issued in November 2022[144] Sales Growth - The company experienced a 36.8% growth in sales of its Viactiv line of products during the three months ended March 31, 2023, compared to the same period in 2022[130] - The Viactiv brand has a strong history of financial success, with revenues of approximately $2,385,000 for the same period in 2022, accounting for 95% of total revenues[92]
Guardion Health Sciences(GHSI) - 2023 Q1 - Quarterly Report