UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to ____

Commission File Number: 001-38861

GUARDION HEALTH SCIENCES, INC.

(Exact name of registrant as specified in its charter)

Delaware		47-4428421
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2925 Richmond Avenue, Suite 1200, Houston, Texas		77098
(Address of principal executive offices)		(Zip Code)

800-873-5141

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.001 per share		GHSI		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes ☒ No

As of July 31, 2024, the Company had 1,284,156 shares of common stock issued and outstanding.

TABLE OF CONTENTS

		Page No.

PART I – FINANCIAL INFORMATION

ITEM 1.	CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)	4

	Condensed Consolidated Balance Sheets – June 30, 2024 (Unaudited) and December 31, 2023	4

	Condensed Consolidated Statements of Operations (Unaudited) – Three Months and Six Months Ended June 30, 2024 and 2023	5

	Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) – Three Months and Six Months Ended June 30, 2024 and 2023	6

	Condensed Consolidated Statements of Cash Flows (Unaudited) – Three Months and Six Months Ended June 30, 2024 and 2023	7

	Notes to Condensed Consolidated Financial Statements (Unaudited) – Three Months and Six Months Ended June 30, 2024 and 2023	8

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	20

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	27

ITEM 4.	CONTROLS AND PROCEDURES	27

PART II – OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDINGS	28

ITEM 1A.	RISK FACTORS	28

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	31

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	31

ITEM 4.	MINE SAFETY DISCLOSURES	31

ITEM 5.	OTHER INFORMATION	31

ITEM 6.	EXHIBITS	32

SIGNATURES		33

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA

This Quarterly Report on Form 10-Q contains “forward-looking statements” which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). 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 and prospects, and other similar matters. These forward-looking 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 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 completion of the Company’s Plan of Liquidation and Dissolution, the use of the proceeds received from the sale of the Viactiv business, the Company’s decision to continue to fund or wind-down its operations subsequent to the sale of the Viactiv business, the sale or other disposition of the Company’s ocular healthcare business, the exploration, timing and feasibility of alternatives to the Company’s Plan of Liquidation and Dissolution, supply chain disruptions, a potential recession and the condition of the economy in general, the Company’s ability to successfully market its remaining products and inventory, and the Company’s ability to maintain compliance with Nasdaq’s continued listing requirements. These statements may be identified by words such as “expects,” “plans,” “projects,” “will,” “may,” “anticipates,” “believes,” “should,” “intends,” “estimates,” “hopes” and other words of similar meaning.

Actual results could differ materially from those contained in forward-looking statements. Many factors could cause actual results to differ materially from those in forward-looking statements, including those matters discussed below. Readers are urged to read the risk factors set forth in our recent filings with the U.S. Securities and Exchange Commission (the “SEC”), including our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and in other documents we file with the SEC from time to time.

Other unknown or unpredictable factors that could also adversely affect our business, financial condition and results of operations may arise from time to time. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, the forward-looking statements discussed in this Quarterly Report on Form 10-Q may not prove to be accurate. Accordingly, you should not place undue reliance on these forward-looking statements, which only reflect the views of our management as of the date of this Quarterly Report on Form 10-Q. Any public statements or disclosures by us following this Quarterly Report on Form 10-Q that modify or impact any of the forward-looking statements contained in this Quarterly Report on Form 10-Q will be deemed to modify or supersede such statements in this Quarterly Report on Form 10-Q. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results or expectations, except as required by law. We qualify all the information presented in this Quarterly Report on Form 10-Q, and particularly our forward-looking statements, by these cautionary statements.

This Quarterly Report on Form 10-Q may include market data and certain industry data and forecasts, which we may obtain from internal company surveys, market research, consultant surveys, publicly available information, reports of governmental agencies and industry publications, articles and surveys. Industry surveys, publications, consultant surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable, but the accuracy and completeness of such information is not guaranteed. While we believe that such studies and publications are reliable, we have not independently verified market and industry data from third-party sources.

PART I – FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Guardion Health Sciences, Inc.

Condensed Consolidated Balance Sheets

	June 30			December 31
	2024			2023
		(Unaudited)

Assets

Current assets
Cash and cash equivalents	$	14,822,826		$	6,359,646
Accounts receivable		12,734			9,322
Inventories		77,797			97,644
Prepaid expenses and other current assets		378,892			562,565
Current assets of discontinued operations		-			4,855,755
Total current assets		15,292,249			11,884,932

Property and equipment, net		6,654			33,245
Total assets	$	15,298,903		$	11,918,177

Liabilities and Stockholders’ Equity

Current liabilities
Accounts payable	$	113,412		$	22,496
Accrued expenses		796,590			499,104
Warrant redemption payable		7,325			-
Current liabilities of discontinued operations		-			797,434
Total current liabilities		917,327			1,319,034
Warrant derivative liability – long-term		631,254			2,453,100
Total liabilities		1,548,581			3,772,134

Commitments and contingencies

Stockholders’ equity
Preferred stock, $0.001 par value; 10,000,000 shares authorized		-			-
Common stock, $0.001 par value; 250,000,000 shares authorized; 1,284,156 shares and 1,275,238 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively		1,284			1,275
Additional paid-in capital		101,737,719			101,711,035
Accumulated deficit		(87,988,681	)		(93,566,267	)
Total stockholders’ equity		13,750,322			8,146,043
Total liabilities, preferred stock and stockholders’ equity	$	15,298,903		$	11,918,177

See accompanying notes to condensed consolidated financial statements.

Guardion Health Sciences, Inc.

Condensed Consolidated Statements of Operations (Unaudited)

	2024			2023			2024			2023
	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023

Revenue
Ocular products	$	72,918		$	79,633		$	154,037		$	173,874

Cost of goods sold
Ocular products		36,572			86,574			80,738			155,134

Gross profit (loss)		36,346			(6,941	)		73,299			18,740

Operating expenses
Research and development		-			-			-			5,183
Sales and marketing		8,088			7,672			11,961			38,547
General and administrative		1,395,721			1,405,771			2,826,754			3,106,585
Loss on disposal of fixed assets		13,863			-			17,229			-
Total operating expenses		1,417,672			1,413,443			2,855,944			3,150,315

Loss from operations		(1,381,326	)		(1,420,384	)		(2,782,645	)		(3,131,575	)

Other income (expense)
Change in fair value of warrant derivative liability		(549,320	)		(255,300	)		(3,817,908	)		1,642,800
Cost related to settlement of placement agent warrants		(319,625	)		-			(319,625	)		-
Interest income, net		117,245			95,534			192,890			194,533
Other income (expense), net		(751,700	)		(159,766	)		(3,944,643	)		1,837,333

Loss from continuing operations		(2,133,026	)		(1,580,150	)		(6,727,288	)		(1,294,242	)

Discontinued operations
Income from discontinued operations		200,923			463,837			578,132			798,688
Transaction costs related to sale of discontinued operations		(485,952	)		(56,098	)		(1,015,642	)		(143,766	)
Gain on sale of discontinued operations		12,742,385			-			12,742,385			-
Total income from discontinued operations		12,457,356			407,739			12,304,875			654,922
Net income (loss)	$	10,324,330		$	(1,172,411	)	$	5,577,587		$	(639,320	)

Earnings (loss) per share - basic
Loss per share from continuing operations	$	(1.66	)	$	(1.25	)	$	(5.25	)	$	(1.02	)
Income per share from discontinued operations		9.70			0.32			9.60			0.52
Net income (loss) per share - basic	$	8.04		$	(0.93	)	$	4.35		$	(0.50	)
Weighted average common shares outstanding – basic		1,284,156			1,267,340			1,282,241			1,267,340

Earnings (loss) per share - diluted
Loss per share from continuing operations	$	(1.64	)	$	(1.25	)	$	(5.22	)	$	(1.02	)
Income per share from discontinued operations		9.60			0.32			9.54			0.52
Net income (loss) per share - diluted	$	7.96		$	(0.92	)	$	4.33		$	(0.50	)
Weighted average common shares outstanding - diluted		1,297,638			1,268,103			1,289,566			1,268,366

See accompanying notes to condensed consolidated financial statements.

Guardion Health Sciences, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)

	Shares		Amount		Capital			Deficit			Equity
	Three Months and Six Months Ended June 30, 2024
	Common Stock				Additional Paid-In			Accumulated			Total Stockholders’
	Shares		Amount		Capital			Deficit			Equity

Balance at December 31, 2023		1,275,238	$	1,275	$	101,711,035		$	(93,566,267	)	$	8,146,043
Fair value of vested stock options		-		-		12,615			-			12,615
Fair value of vested restricted stock		-		-		2,170			-			2,170
Common stock issued upon exercise of warrants		8,918		9		(9	)		-			-
Net loss		-		-		-			(4,746,744	)		(4,746,744	)
Balance at March 31, 2024		1,284,156		1,284		101,725,811			(98,313,011	)		3,414,085
Fair value of vested stock options		-		-		9,737			-			9,737
Fair value of vested restricted stock		-		-		2,170			-			2,170
Net income		-		-		-			10,324,330			10,324,330
Balance at June 30, 2024		1,284,156	$	1,284	$	101,737,719		$	(87,988,681	)	$	13,750,322

	Three Months and Six Months Ended June 30, 2023
	Common Stock				Additional Paid-In			Accumulated			Total Stockholders’
	Shares		Amount		Capital			Deficit			Equity

Balance at December 31, 2022		1,267,340	$	1,267	$	101,640,955		$	(93,724,300	)	$	7,917,922
Fair value of vested stock options		-		-		25,182			-			25,182
Fair value of vested restricted stock		-		-		5,329			-			5,329
Net income		-		-		-			533,091			533,091
Balance at March 31, 2023		1,267,340		1,267		101,671,466			(93,191,209	)		8,481,524
Balance		1,267,340		1,267		101,671,466			(93,191,209	)		8,481,524

Fair value of vested stock options		-		-		(73,456	)		-			(73,456	)
Fair value of vested restricted stock		-		-		5,388			-			5,388
Net loss		-		-		-			(1,172,411	)		(1,172,411	)
Net income (loss)		-		-		-

SEC Form 10-Q filed by Guardion Health Sciences Inc.