Healthy Extracts Reports Q2 2024 Net Revenue Up 54% to Record High, Driving Positive EPS

Rhea-AI Summary

Healthy Extracts (OTCQB:HYEX) reported strong Q2 2024 results with net revenue up 54% to a record $908,000. Key highlights include:

- Gross profit increased 71% to $486,000 with margin up to 53.5%
- Third consecutive positive cash flow quarter, generating $80,000
- Net income of $113,500 or $0.04 per share
- Amazon 'Subscribe & Save' customers up 70% year-over-year
- Direct-to-consumer subscription customers up 26% year-over-year

The company anticipates continued growth in 2024 with new product introductions, including WHITNEY JOHNS™ NUTRITION collagen gel packs and BergaMet MYNUS sugar blocker. Healthy Extracts expects strong performance in top-line growth, increased cash flow, profitability, and market share expansion.

Positive

• Record Q2 2024 net revenue of $908,000, up 54% year-over-year
• Gross profit increased 71% to $486,000 with margin improvement of 510 basis points to 53.5%
• Third consecutive quarter of positive cash flow, generating $80,000
• Net income of $113,500 or $0.04 per share, compared to a net loss in the same period last year
• Amazon 'Subscribe & Save' customers increased 70% year-over-year
• Direct-to-consumer subscription customers increased 26% year-over-year
• Debt reduced by $108,000 while increasing cash reserves
• Operating expenses decreased 68% to $498,000

Negative

• None.

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.

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FAQ

What was Healthy Extracts' (HYEX) revenue growth in Q2 2024?

Healthy Extracts (HYEX) reported a 54% increase in net revenue to a record $908,000 in Q2 2024 compared to the same period last year.

How much did Healthy Extracts' (HYEX) gross profit improve in Q2 2024?

Healthy Extracts' (HYEX) gross profit increased 71% to $486,000 in Q2 2024, with gross margin improving by 510 basis points to 53.5%.

What was Healthy Extracts' (HYEX) net income in Q2 2024?

Healthy Extracts (HYEX) reported a net income of $113,500 or $0.04 per basic and diluted share in Q2 2024.

How many consecutive quarters of positive cash flow has Healthy Extracts (HYEX) achieved?

Healthy Extracts (HYEX) achieved its third consecutive quarter of positive cash flow in Q2 2024, generating approximately $80,000.

What new products is Healthy Extracts (HYEX) planning to launch in 2024?

Healthy Extracts (HYEX) plans to launch WHITNEY JOHNS™ NUTRITION collagen gel packs and BergaMet MYNUS sugar blocker in the second half of 2024.