Net Revenue up 12% with Strong Subscription-Based Revenue Growth
LAS VEGAS, NV / ACCESSWIRE / May 20, 2024/Healthy Extracts Inc. (OTCQB:HYEX), a platform for acquiring, developing, patenting, marketing, and distributing plant-based nutraceuticals that target select high-growth categories within the multibillion-dollar nutraceuticals market, reported results for the quarter ended March 31, 2024. All comparisons are to the year-ago period unless otherwise noted.
Q1 2024 Financial Highlights
Net revenue increased 12% to $689,000, driven primarily by distribution channel expansion and growth in subscription-based revenue.
Gross margin expanded to 59.3% from 45.2% due to improved manufacturing efficiency.
Achieved second sequential positive cash flow quarter, generating $68,000 in the quarter.
Net loss of $861,000 or $(0.30) per basic and diluted share, primarily due to interest expense, stock-based compensation and the change in fair value of derivatives.
Net totaled of $2,500 after excluding non-core and non-cash costs associated with a planned acquisition and public offering expenses, regulatory expense, stock-based compensation, change in fair value of derivative expense, and interest expense. Excluding these costs, the first quarter of 2024 was the second quarter in a row of profitability.
Amazon "Subscribe & Save" customers at March 31, 2024 increased 81% versus March 31, 2023. Subscription growth helps reduce customer acquisition costs, increases traction, and provides greater visibility into future revenue.
Direct-to-consumer subscription customers at March 31, 2024 increased 28% versus March 31, 2023.
Management Commentary
"In Q1, our top line continued to grow at a healthy double-digit pace, as our product offerings, customer subscriptions, and distribution channels continued to develop and expand," commented Healthy Extracts president, Duke Pitts. "During the quarter, our enhanced manufacturing efficiencies expanded gross margins by 14.1 percentage points to 59.3%.
"These favorable trends contributed to our second cash flow positive quarter in a row at $68,000 for the quarter. Excluding non-core and non-cash costs, we also generated our second quarter in a row of profitability.
"This performance has put us on a solid financial foundation in terms of cash flow and ability to service debt. At the beginning of April, we completed a restructuring and streamlining of debt which resulted in an additional $15,000 a month in positive cash flow, and we plan to invest this into further growing our revenue streams.
"Altogether, Healthy Extracts have never been in a stronger financial position, setting the stage for continued growth without increasing our dependence on the financings or the capital markets.
"Last week, we engaged Bush & Associates as our new independent registered public accounting firm. We believe their more favorable rate structure and nearby locality will decrease our accounting costs and improve efficiencies for future quarters.
"In the second half of this year, we plan to launch several new products into our diverse sales and distribution channels. The new products, which are far along in development, expand our proprietary and patented product portfolio into new categories. Introductions include our exclusive Gelteq delivery system in the anti-aging and sugar blockers categories. We expect their launch will benefit from the broad market channels and customer base we have strategically developed and invested in over the last several years.
"Our overall growth strategy continues to involve both organic growth and strategic acquisitions, with a razor-sharp focus on acquisition targets that experience new exponential growth by leveraging our extensive distribution systems and network.
"We continued our efforts to uplist to a major U.S. stock exchange which we believe would help strengthen our position to acquire complementary businesses.
"We anticipate continued strong progress through the rest of the year for Healthy Extracts, as we focus on top line growth, increased cash flow, and market share expansion."
2024 Financial Outlook
In Q2 and Q3, the company anticipates continued growth and profitability excluding non-cash transactions.
2024 Product Outlook
Healthy Extracts' top brand ambassador and renowned fitness expert, Whitney Johns, is preparing to launch WHITNEY JOHNS? NUTRITION on-the-go gel packs for COLLAGEN (anti-aging) second half of 2024. These products will be based on Healthy Extracts' exclusive oral delivery system and proprietary formulations.
The company is also planning to launch in the second half of 2024 its new BergaMet MYNUS sugar blocker, which is specially formulated to reduce up to 42% of the sugar impact from meals. The MYNUS on-the-go gel-packs will be made available under the company's exclusive U.S. and Canadian licensing and manufacturing agreement with Gelteq.
Q1 2024 Financial Summary
Net revenue in the first quarter of 2024 increased 12% to $689,000 from $615,000 in the same year-ago quarter, primarily due to distribution channel expansion and, to a lesser extent, growth in subscription-based revenue.
Gross profit totaled $408,000 or 59.3% of net revenue as compared to $278,000 or 45.2% of net revenue in the same year-ago quarter. The increase in gross margin was a result of improved manufacturing efficiency.
Operating expenses, excluding the offering and regulatory expense, and stock compensation expense, decreased $286,000 to $397,000 compared to the same year-ago quarter. The decrease in operating expenses was due to costs associated with on-going efforts in the acquisitions and the planned public offering and uplist to a major exchange in the first quarter of 2023 that did not occur in the first quarter of 2024.
Net loss totaled $861,000 or $(0.30) per basic and diluted share, as compared to a net loss of $579,000 or $(0.20) per basic and diluted share in the same year-ago period.
Excluding costs related to the company's planned acquisition and public offering expenses, regulatory expense, stock-based compensation expense, change in fair value of derivative expense and interest expense, net income in the first quarter of 2024 totaled $2,500 or $0.00 per basic and diluted share.
About Healthy Extracts"Live Life Young Again"
Healthy Extracts Inc. is a platform for acquiring, developing, researching, patenting, marketing, and distributing plant-based nutraceuticals.
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 distributed in North America containing Citrus Bergamot SuperFruit?. This superfruit has the highest known concentration of polyphenols and flavonoids.
UBN's KETONOMICS? proprietary formulations, which have been designed to enhance brain activity, focus, headache and cognitive behavior, provide many sales and intellectual property licensing opportunities.
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, 2024, 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 & 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.?
Company Contact Duke Pitts, President Healthy Extracts Inc. Tel (720) 463-1004 Email contact
Investor Contact Ronald Both CMA Investor Relations Tel (949) 432-7566 Email contact
Media Contact: Tim Randall CMA Media Relations Tel (949) 432-7572 Email Contact
HEALTHY EXTRACTS, INC. CONSOLIDATED STATEMENT OF OPERATIONS FOR THE MONTH ENDING MARCH 31, 2024 AND 2023 (Unaudited)
FOR THE MONTHS ENDING
MARCH 31
2024
2023
REVENUE
Revenue
$
688,786
$
614,943
Net revenue
688,786
614,943
COST OF REVENUE
Cost of goods sold
280,428
337,102
Total cost of revenue
280,428
337,102
GROSS PROFIT
408,358
277,841
OPERATING EXPENSES
General and administrative
470,431
683,029
Total operating expenses
470,431
683,029
OTHER INCOME (EXPENSE)
Interest expense, net of interest income
(42,557
)
(89,060
)
Change in fair value on derivative
(756,628
)
(84,908
)
Total other income (expense)
(799,185
)
(173,968
)
Net income/(loss) before income tax provision
(861,259
)
(579,157
)
NET INCOME/(LOSS)
$
(861,259
)
$
(579,157
)
Income/(Loss) per share - basic and diluted
$
(0.30
)
$
(0.20
)
Weighted average number of shares outstanding - basic and diluted
2,915,410
2,854,290
HEALTHY EXTRACTS, INC. CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2024 AND DECEMBER 31, 2023 (Unaudited)
MARCH 31,
DECEMBER 31,
2024
2023
ASSETS
CURRENT ASSETS
Cash
$
87,312
$
19,441
Accounts receivable
24,055
30,440
Inventory, net
1,552,814
1,626,283
Offering costs
149,274
151,931
Right of use asset, net
56,523
71,583
Total current assets
1,869,978
1,899,678
Fixed assets
2,757
3,306
Patents/Trademarks
521,881
521,881
Deposit
16,890
16,890
Goodwill
193,260
193,260
Total other assets
734,787
735,336
TOTAL ASSETS
$
2,604,765
$
2,635,014
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Accounts payable
$
117,515
$
116,842
Accrued liabilities
206,452
215,069
Lease liabilities - current
58,906
65,229
Lease liabilities - long-term
-
9,222
Notes payable
295,795
361,093
Notes payable - related party
178,366
83,366
Convertible debt, net of discount
628,045
608,601
Accrued interest payable
50,647
64,386
Accrued interest payable - related party
6,615
2,465
Derivative liabilities
910,779
154,150
Total current and total liabilities
2,453,120
1,680,424
STOCKHOLDERS' EQUITY
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, 50,000,000 shares authorized, 2,963,906 shares issued and outstanding as of March 31, 2024, and 2,954,104 shares issued and outstanding as of December 31, 2023, respectively
354,502
354,492
Additional paid-in capital
19,058,075
18,999,770
Accumulated deficit
(19,260,931
)
(18,399,673
)
Total stockholders' equity
151,646
954,590
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
2,604,765
$
2,635,014
HEALTHY EXTRACTS, INC. CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
FOR THE MONTH ENDING
MARCH 31
2024
2023
Cash Flows from Operating Activities:
Net Income/(Loss)
$
(861,259
)
$
(579,157
)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization
549
549
Warrants issued for services
58,314
16,000
Change in fair value on derivative liability
756,628
84,908
Changes in operating assets and liabilities:
Accounts receivable
6,385
(29,604
)
Inventory
73,469
164,922
Offering Costs
2,657
-
Cost in acquisition of Hyperion/OP&M
-
(32,617
)
Right of use asset, net
15,060
-
Accounts payable
673
23,170
Accrued liabilities
(8,617
)
(8,683
)
Accrued interest payable
(13,739
)
17,636
Accrued interest payable - related party
4,150
-
Lease liability - current
(6,324
)
-
Lease liability - long-term
(9,222
)
-
Net Cash used in Operating Activities
18,724
(342,876
)
Cash Flows from Investing Activities:
Purchase of fixed assets
-
-
Gain on sale of asset
-
-
Cash flows provided by (used in) Investing Activities:
-
-
Cash Flows from Financing Activities:
Proceeds from issuance of common stock
-
-
Proceeds from issuance of convertible debt
19,445
388,888
Payments for repayment of convertible debt
-
(110,535
)
Proceeds from issuance of notes payable
118,132
136,705
Payments for repayment of notes payable
(183,430
)
75,370
Proceeds from issuance of notes payable - related party
95,000
-
Payments for repayment of notes payable - related party
