Strong Subscription-Based Revenue Growth and Third Sequential Positive Cash Flow Quarter
LAS VEGAS, NV / ACCESSWIRE / August 14, 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 three and six months ended June 30, 2024. All comparisons are to the same year-ago period unless otherwise noted.
Q2 2024 Financial Highlights
Net revenue increased 54% to a record $908,000, driven primarily by distribution channel expansion, particularly wholesale, and growth in subscription-based revenue.
Gross profit increased 71% to $486,000 with gross margin up 510 basis points to 53.5% due to manufacturing efficiency and product mix.
Achieved third sequential positive cash flow quarter, generating approximately $80,000 in the quarter.
Operating expenses decreased 68% to $498,000 in the quarter.
Net income of $113,500 or $0.04 per basic and diluted share.
Amazon "Subscribe & Save" customers at June 30, 2024 increased 70% year-over-year to a record number of subscribers. Direct-to-consumer subscription customers (excluding Amazon) at June 30, 2024 increased 26% year-over-year. Subscription growth helps reduce customer acquisition costs, increases traction, and provides greater visibility into future revenue.
Management Commentary
"In Q2, our record-breaking top-line growth, margin expansion, and improved cash flow were driven by strong gains in both direct-to-consumer and wholesale sales," stated Healthy Extracts President, Duke Pitts. "Even aside from wholesale that was unusually high for the quarter, we surpassed our earlier stated expectations for the quarter, reflecting growing momentum with our target retail customers.
"During the quarter we also strengthened our financial foundation, reducing debt by more than $108,000 while simultaneously increasing our cash reserves. In fact, our debt restructuring and streamlining in Q2 resulted in an additional $15,000 per month in positive cash flow. As a result, we achieved our third consecutive quarter of positive cash flow, generating approximately $80,000. We are planning to reinvest this cash flow into further expanding our product offerings and revenue streams, including the valuable recurring revenue from product subscriptions.
"For our Amazon "Subscribe & Save" offers, we generated record sales on Amazon in July, primarily as a result of our sales and marketing efforts during Prime Day. We expect Amazon sales to continue to be strong in the coming months.
"Given our success with the Amazon "Subscribe and Save" offer, in July we replaced our traditional buy-2-get-1 offers on our DTC eCommerce website with a 20% discount for subscribing to monthly shipments. We expect this move to increase sales and margins, as well as the lifetime value of our customers. In fact, the new offer has been well received, generating a significant increase in overall subscriber growth during the first several weeks.
"Looking ahead, we anticipate continued strong performance in top-line growth, increased cash flow, profitability, and market share expansion as our addressable markets strengthen. This growth will be largely driven by the launch of new products that will benefit from the broad market channels we have strategically developed and invested in over the past several years. These investments have proven to be the most effective way to create significant shareholder value, and this will continue to be our top priority."
2024 Financial Outlook
For the remainder of 2024, the company anticipates continued growth with new product introductions laying a path for higher profits 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) in the 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.
Q2 2024 Financial Summary
Net revenue in the second quarter of 2024 increased 54% to $908,000 from $588,000 in the same year-ago quarter, primarily due to distribution channel expansion and to a lesser extent the growth in subscription-based revenue.
Gross profit totaled $486,000 or 53.5% of net revenue as compared to $285,000 or 48.4% of net revenue in the same year-ago quarter. The increase in gross margin was a result of manufacturing efficiency and product mix.
Operating expenses decreased 68% to $498,000 as compared to $1.5 million in the same year-ago quarter. The decrease in operating expenses was primarily due to one-time expenses in the year-ago quarter related to the company's planned uplist to Nasdaq and issuance of options and warrants that did not reoccur in the second quarter of 2024, and to a lesser extent the reduction in general operating expense in the second quarter of 2024.
Net income totaled $113,500 or $0.04 per basic and diluted share, as compared to a net loss of $1.3 million or $(0.44) per basic and diluted share in the same year-ago period, with the improvement primarily due to the decreased expenses and a change in the fair value of derivative expense.
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 second quarter of 2024 totaled $37,000 or $0.01 per basic and diluted share.
First Half 2024 Financial Summary
Net revenue in the second half of 2024 increased 33% to $1.6 million from $1.2 million in the same year-ago period, primarily due to product line and distribution channel expansion.
Gross profit totaled $894,000 or 56.0% of net revenue as compared to $563,000 or 46.8% of net revenue in the same year-ago period. The increase in gross margin was a result of product mix sold, and the decrease in manufacturing and freight costs.
Operating expenses decreased 56% to $968,000 compared to the same year-ago period. The decrease in operating expenses was primarily due to one-time expenses in the same year-ago period related to the company's planned uplist to Nasdaq and the issuance of options and warrants that did not reoccur in the first half of 2024, and to a lesser extent the reduction in general operating expense in the first half of 2024.
Net loss for the first half of 2024 totaled $0.7 million or $(0.25) per basic and diluted share, as compared to $1.8 million or $(0.64) per basic and diluted share. The improvement in net loss was primarily due to the same factors in the second quarter of 2024.
Excluding costs related to the company's planned acquisition and public offering expenses, regulatory expense, stock compensation expense, change in fair value on derivative expense and interest expense, net income totaled $25,000 or $0.01 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.
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, 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
HEALTHY EXTRACTS, INC.
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2024 AND DECEMBER 31, 2023
(Unaudited)
| JUNE 30 |
|
| DECEMBER 31, |
| |||
| 2024 |
|
| 2023 |
| |||
ASSETS |
|
|
| |||||
|
|
|
|
|
| |||
|
|
|
|
|
| |||
CURRENT ASSETS |
|
|
|
|
|
| ||
Cash |
| $ | 148,231 |
|
| $ | 19,441 |
|
Accounts receivable |
|
| 90,560 |
|
|
| 30,440 |
|
Inventory, net |
|
| 1,319,622 |
|
|
| 1,626,283 |
|
Offering costs |
|
| 149,274 |
|
|
| 151,931 |
|
Right of use asset, net |
|
| 41,077 |
|
|
| 71,583 |
|
Total current assets |
|
| 1,748,764 |
|
|
| 1,899,678 |
|
|
|
|
|
|
|
|
| |
Fixed assets |
|
| 3,852 |
|
|
| 3,306 |
|
Patents/Trademarks |
|
| 521,881 |
|
|
| 521,881 |
|
Deposit |
|
| 16,890 |
|
|
| 16,890 |
|
Goodwill |
|
| 193,260 |
|
|
| 193,260 |
|
Total other assets |
|
| 735,883 |
|
|
| 735,336 |
|
|
|
|
|
|
|
|
| |
TOTAL ASSETS |
| $ | 2,484,646 |
|
| $ | 2,635,014 |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
| |||||
|
|
|
|
|
|
|
| |
LIABILITIES |
|
|
|
|
|
|
|
|
Accounts payable |
| $ | 54,020 |
|
| $ | 116,842 |
|
Accrued liabilities |
|
| 188,593 |
|
|
| 215,069 |
|
Lease liabilities - current |
|
| 42,745 |
|
|
| 65,229 |
|
Lease liabilities - long-term |
|
| - |
|
|
| 9,222 |
|
Notes payable |
|
| 214,424 |
|
|
| 361,093 |
|
Notes payable - related party |
|
| 178,366 |
|
|
| 83,366 |
|
Convertible debt, net of discount |
|
| 601,251 |
|
|
| 608,601 |
|
Accrued interest payable |
|
| 55,428 |
|
|
| 64,386 |
|
Accrued interest payable - related party |
|
| 13,198 |
|
|
| 2,465 |
|
Derivative liabilities |
|
| 736,623 |
|
|
| 154,150 |
|
Total current and total liabilities |
|
| 2,084,646 |
|
|
| 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, 2,993,572 shares issued and outstanding as of June 30, 2024, and 2,954,104 shares issued and outstanding as of December 31, 2023, respectively |
|
| 354,532 |
|
|
| 354,492 |
|
Additional paid-in capital |
|
| 19,192,899 |
|
|
| 18,999,770 |
|
Accumulated deficit |
|
| (19,147,431 | ) |
|
| (18,399,673 | ) |
Total stockholders' equity |
|
| 400,000 |
|
|
| 954,590 |
|
|
|
|
|
|
|
|
| |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
| $ | 2,484,646 |
|
| $ | 2,635,014 |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
|
| |||||||
HEALTHY EXTRACTS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDING JUNE 30, 2024 AND 2023
(Unaudited)
| FOR THE 3 MONTH ENDING |
|
| FOR THE SIX MONTHS ENDING |
|
| |||||||||||
| JUNE 30 |
|
| JUNE 30 |
|
| |||||||||||
| 2024 |
|
| 2023 |
|
| 2024 |
|
| 2023 |
|
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
REVENUE |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Revenue |
| $ | 908,389 |
|
| $ | 588,484 |
|
| $ | 1,597,175 |
|
| $ | 1,203,427 |
|
|
Net revenue |
|
| 908,389 |
|
|
| 588,484 |
|
|
| 1,597,175 |
|
|
| 1,203,427 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
COST OF REVENUE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
|
| 422,301 |
|
|
| 303,415 |
|
|
| 702,728 |
|
|
| 640,517 |
|
|
Total cost of revenue |
|
| 422,301 |
|
|
| 303,415 |
|
|
| 702,728 |
|
|
| 640,517 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
GROSS PROFIT |
|
| 486,088 |
|
|
| 285,069 |
|
|
| 894,446 |
|
|
| 562,911 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative |
|
| 497,996 |
|
|
| 1,540,942 |
|
|
| 968,427 |
|
|
| 2,223,972 |
|
|
Total operating expenses |
|
| 497,996 |
|
|
| 1,540,942 |
|
|
| 968,427 |
|
|
| 2,223,972 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
OTHER INCOME (EXPENSE) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net of interest income |
|
| (48,748 | ) |
|
| (25,212 | ) |
|
| (91,305 | ) |
|
| (114,272 | ) |
|
Change in fair value on derivative |
|
| 174,156 |
|
|
| 13,850 |
|
|
| (582,472 | ) |
|
| (71,058 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Total other income (expense) |
|
| 125,408 |
|
|
| (11,362 | ) |
|
| (673,777 | ) |
|
| (185,331 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net income/(loss) before income tax provision |
|
| 113,500 |
|
|
| (1,267,235 | ) |
|
| (747,758 | ) |
|
| (1,846,392 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
NET INCOME/(LOSS) |
| $ | 113,500 |
|
| $ | (1,267,235 | ) |
| $ | (747,758 | ) |
| $ | (1,846,392 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Income/(Loss) per share - basic and diluted |
| $ | 0.04 |
|
| $ | (0.44 | ) |
| $ | (0.25 | ) |
| $ | (0.64 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Weighted average number of shares outstanding - basic and diluted |
|
| 2,967,281 |
|
|
| 2,878,146 |
|
|
| 2,967,281 |
|
|
| 2,878,629 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
HEALTHY EXTRACTS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
| FOR THE SIX MONTH ENDING |
|
| ||||||
| JUNE 30 |
|
| ||||||
| 2024 |
|
| 2023 |
|
| |||
Cash Flows from Operating Activities: |
|
|
|
|
|
|
| ||
Net Income/(Loss) |
| $ | (747,758 | ) |
| $ | (1,846,392 | ) |
|
|
|
|
|
|
|
|
|
| |
Adjustments to reconcile net loss to net cash |
|
|
|
|
|
|
|
|
|
used in operating activities: |
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
| (547 | ) |
|
| 1,098 |
|
|
Warrants issued for services |
|
| 193,168 |
|
|
| 1,148,857 |
|
|
Change in fair value on derivative liability |
|
| 582,472 |
|
|
| 71,058 |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
| (60,120 | ) |
|
| (9,106 | ) |
|
Inventory |
|
| 306,661 |
|
|
| 354,503 |
|
|
Offering Costs |
|
| 2,657 |
|
|
| - |
|
|
Cost in acquisition of Hyperion/OP&M |
|
| - |
|
|
| (65,617 | ) |
|
Right of use asset, net |
|
| 30,506 |
|
|
| (100,623 | ) |
|
Note receivable |
|
| - |
|
|
| (34,500 | ) |
|
Accounts payable |
|
| (62,822 | ) |
|
| 21,011 |
|
|
Accrued liabilities |
|
| (26,476 | ) |
|
| (65,883 | ) |
|
Accrued interest payable |
|
| (8,958 | ) |
|
| 18,555 |
|
|
Accrued interest payable - related party |
|
| 10,732 |
|
|
| - |
|
|
Lease liability - current |
|
| (22,484 | ) |
|
| 56,139 |
|
|
Lease liability - long-term |
|
| (9,222 | ) |
|
| 47,409 |
|
|
Net Cash used in Operating Activities |
|
| 187,809 |
|
|
| (403,493 | ) |
|
|
|
|
|
|
|
|
|
| |
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 |
|
| (0 | ) |
|
| - |
|
|
Proceeds from issuance of convertible debt |
|
| 25,926 |
|
|
| 350,000 |
|
|
Proceeds from issuance of noted payable |
|
| 120,669 |
|
|
| 431,000 |
|
|
Proceeds from issuance of noted payable - related party |
|
| 95,000 |
|
|
| - |
|
|
Loan origination fees |
|
| - |
|
|
| 68,888 |
|
|
Net Cash provided by Financing Activities |
|
| (59,019 | ) |
|
| 430,342 |
|
|
|
|
|
|
|
|
|
|
| |
Increase (decrease) in cash |
|
| 128,790 |
|
|
| 26,850 |
|
|
Cash at beginning of period |
|
| 19,441 |
|
|
| 65,651 |
|
|
Cash at end of period |
| $ | 148,231 |
|
| $ | 92,501 |
|
|
|
|
|
|
|
|
|
|
| |
SOURCE: HEALTHY EXTRACTS INC.
View the original press release on accesswire.com
