Guardion Health Sciences Stock

Guardion Health Sciences, Inc. (Guardion) operates as a clinical nutrition company.

The company develops and distributes clinically supported nutrition, medical foods, and dietary supplements. The company offers a portfolio of science-based, clinically supported products and devices designed to support healthcare professionals and providers, and their patients and consumers. These products are designed to support retail consumers, healthcare professionals and providers, and their patients by supporting bone health, eye health, cardiovascular health, and brain health through nutrients, such as Calcium, Vitamin D, Vitamin K, Carotenoids, and Omega-3s.

The company's profile and focus fundamentally changed with the acquisition of Activ Nutritional, LLC (Activ or Viactiv as the context requires) in June 2021, the owner and distributor of the Viactiv line of supplements for bone health and other applications.

The acquisition and integration of the Viactiv line of products has changed the company's financial position, market profile, and brand and operating focus. In order to leverage the Viactiv platform, the company has searched for additional complementary business opportunities. Additionally, the company is focusing on new product development that it can launch under the Viactiv brand and in the year ended December 31, 2022, the company launched its new Omega Boost Gel Bites product.

On June 1, 2021, the company completed its acquisition of Activ. Activ owns the Viactiv line of supplement chews for bone health and other applications, which are marketed through many of the nation's largest retailers, including among others, Walmart (retail and online), Target, and Amazon.

The company's products are marketed primarily through a broad distribution platform that includes supermarkets, mass merchandisers, wholesale clubs, drugstores, and other discount and specialty stores, and websites and other e-commerce channels, all of which sell its products to consumers. The company also utilizes the services of independent brokers, who represent its products in the food, mass, club, and numerous other classes of trade. The company's products are stored in third-party owned warehouses and are delivered by independent trucking companies.

Product Offerings

The Viactiv line of supplements contains several flavored nutritional supplement products, but the milk chocolate and caramel flavored calcium chews constitute the main product category.

Viactiv was first introduced to the market as a calcium-fortified soft chew intended to deliver clinical nutrition to women in a way that is enjoyable to taste and easy to consume. The chews are available in chocolate and caramel flavors, each delivering nutrition to help consumers maintain health goals, such as strong bones and immune support. The calcium chews contain 650mg of Calcium that deliver benefits of hard-to swallow pills with the great taste you expect from a gummy. Compared to the leading gummies, the company's calcium chews are one of the only ones with both Vitamin D and K1 to boost calcium absorption and help bone mineral density. Viactiv calcium chews are regulated in the U.S. as a dietary supplement.

In February 2022, the company began the marketing of its Viactiv Omega Boost Gel Bites product. The 1,200 mg Omega-3 gel bites are designed to provide total body support, including cardiovascular, brain, joint, and eye health. The new dosage form is able to provide the potency of large, hard-to-swallow soft gels, in a great tasting chewable format that has ten times more Omega-3 than the leading fish oil gummies. The gel bite dosage form has been shown to have better absorption and fewer digestive issues than regular soft gel formulas, as well as no unpleasant fishy aftertaste and no sugar, which is associated with many other Omega-3 products. Viactiv Omega Boost Gel Bites are regulated in the U.S. as a dietary supplement.

GlaucoCetin, considered a dietary supplement, is a clinically supported, targeted nutrition. GlaucoCetin is designed specifically to provide nutrients to support mitochondrial function with additional antioxidants to reduce oxidative stress and increasing blood flow throughout the body, especially for enhanced eye support and ocular health. The company markets GlaucoCetin through direct-to-consumer strategies, such as social media and paid search advertising.

The company also sells Lumega-Z, its legacy medical food product that has a formula designed to replenish and restore the macular protective pigment, simultaneously delivering critical and essential nutrients to the eye.

As a medical food, Lumega-Z must be administered under the supervision of a physician or professional healthcare provider. The company uses a variety of marketing strategies to increase awareness of Lumega-Z among ophthalmologists and optometrists. It also markets Lumega-Z through direct-to-consumer strategies.

The company distributes Lumega-Z and GlaucoCetin through E-commerce, in an online store that is operated at www.viactiv.com.

Prior Product Offerings

Nutriguard: The company marketed a brand of dietary supplement products under the NutriGuard brand, which the company acquired in 2019, but decided to stop marketing the brand after acquiring the Viactiv line of supplements in June of 2021. ImmuneSF, a unique proprietary nutraceutical formulation designed to support and maintain an effective immune system was the first product developed after the acquisition of NutriGuard. This formulation contained a synergistic blend of antioxidant and anti-inflammatory nutrients. While the company still intend to build a portfolio of nutraceutical products, it plans to launch such products under the Viactiv brand rather than the NutriGuard brand.

VectorVision: In September 2017, the company acquired VectorVision, Inc. (VectorVision), a company that specialized in the standardization of contrast sensitivity, glare sensitivity, low contrast acuity, and early treatment diabetic retinopathy study visual acuity testing. VectorVision's standardization system is designed to provide the practitioner or researcher with the ability to delineate very small changes in visual capability, either as compared to the population or from visit to visit. VectorVision developed, manufactured and sold equipment and supplies for standardized vision testing for use by eye doctors in clinics, for researchers to use in clinical trials, for real-world vision evaluation, and industrial vision testing.

The company intends to explore various alternative ways to preserve, manage and exploit its intellectual property rights, including its U.S. patents, associated with the VectorVision technology, both domestically and internationally. As a result of this change to the VectorVision business strategy, it will be able to better focus its efforts and deploy capital resources to more growth-oriented brands and product lines, like Viactiv and Omega Boost, and other products in development, that it hopes to bring to market in 2023.

Strategy

Dietary Supplements

The company intends to formulate high quality scientifically credible dietary supplements with a goal to become a globally respected clinical nutrition company.

The company's products are marketed primarily through a broad distribution platform that includes supermarkets, mass merchandisers, wholesale clubs, drugstores, and other discount and specialty stores, and websites and other e-commerce channels, all of which sell its products to consumers. The company also utilizes the services of independent brokers, who represent its products in the food, mass, club, and numerous other classes of trade. The company's products are stored in third-party owned warehouses and are delivered by independent trucking companies.

Growth Strategy

Developing new products, growing the company's established distribution and marketing its products are the keys to growing its business. The company has several innovation initiatives underway that are aimed at increasing the number of new products in its product portfolio and expanding its total addressable market, and it plans to grow its established distribution network. For example, the company launched a new product named Viactiv Omega Boost Gel Bites product earlier in 2022. The introduction of the Omega Boost Gel Bites product greatly expanded the total addressable market for Viactiv by expanding the brand into the established sizeable omega-3 market.

The company's network includes many of the nation's largest retailers, including among others, Walmart (retail and online), Target, and Amazon. It expanded its sales channels for Viactiv during the year by launching a direct-to-consumer website. This new channel offers Viactiv customers an additional channel to purchase the company's products, as well as offering customers with more customized offers and information. The company also focuses on marketing initiatives that strengthen its brand and target consumers who would benefit most from its specific products.

Sales

Viactiv has traditionally sold the majority of its products through traditional retailers via the use of third party brokers. The company has continued to utilize these brokers to sell the Viactiv products to retailers rather than employing an internal sales force. Online retailers have represented a smaller portion of sales, but these sales can be meaningful and play an important role in the company's eCommerce strategy over time. In addition, it sells a limited amount of Viactiv products directly to consumers via its website, and plans to continue to invest in this channel to grow sales. While the footprint for the company's direct-to-consumer channel is small, this channel to play an important role in its new product launches and growth.

Marketing - Digital

The company focuses on marketing initiatives that strengthen its brand and target consumers who would benefit most from its products. It utilizes digital marketing for the majority of its marketing expenditures.

Marketing - Practitioners

Healthcare practitioners are important stakeholders for the company's products, especially Lumega-Z and GlaucoCetin. This approach is designed to increase marketing reach through a combination of collaboration with industry-specific publishers, peer-to-peer promotion using key opinion leader clinicians, organic and paid search engine optimization and marketing, and other content-driven and educational approaches.

Domestic and International Expansion Strategy

The company primarily focuses on expanding its business domestically rather than internationally. The acquisition of Activ in 2021 shifted its strategic focus towards the Viactiv line of supplements. As a result, the domestic markets allow the company to leverage Viactiv's strong consumer brand awareness, distribution networks, and key third-party vendors relationships.

Intellectual Property

Patents

The company owns and has exclusive rights to four U.S. patents, one Canadian patent, one Chinese patent, one Hong Kong patent application, two Japanese patents, and one Korean patent with respect to various products and product candidates, as follows:

U.S. Patent No. 9,486,136 entitled 'Apparatus for Use in the Measurement of Macular Pigment Optical Density and/or Lens Optical Density of an Eye,' issued on November 8, 2016.

U.S. Patent No. 10,016,128 entitled 'Method and Apparatus for Vision Acuity Testing,' issued on July 10, 2018.

U.S. Patent No. 10,022,045 entitled 'Method and Apparatus for Vision Acuity Testing,' issued on July 17, 2018.

U.S. Patent No. 10,456,028 entitled 'Apparatus for Use in the Measurement of Macular Pigment Optical Density and/or Lens Optical Density of an Eye,' issued on October 29, 2019.

Canadian Patent No. 2864154, titled 'Apparatus for Use in the Measurement of Macular Pigment Optical Density and/or Lens Optical Density of an Eye,' granted on May 18, 2021.

Chinese Patent No. ZL 2017800672763, titled 'Method and Apparatus for Vision Acuity Testing,' granted on June 7, 2022.

Hong Kong Patent Appl. No. HK15105364.0A, titled 'Apparatus for Use in the Measurement of Macular Pigment Optical Density and/or Lens Optical Density of an Eye,' filed June 5, 2015 and published Dec. 4, 2015 as HK1204758A1.

Japanese Patent No. 7039602, titled 'Method and Apparatus for Vision Acuity Testing,' granted on March 11, 2022.

Japanese Patent No. 7157070, titled 'Method and Apparatus for Vision Acuity Testing,' granted on October 11, 2022.

Korean Patent No. 10-2422480, titled 'Method and Apparatus for Vision Acuity Testing,' granted on July 14, 2022.

Trademarks

The company has twelve trademarks registered with the United States Patent and Trademark Office (USPTO), all of which are used in association with the Guardion line of products. In addition, the company has five trademarks registered with the USPTO, which are used in association with the Viactiv line of products.

Furthermore, the company has 11 trademarks registered in foreign jurisdictions for use with its Guardion line of products. The company has 15 registrations for the Viactiv trademark in a broad range of geographies.

Research and Development

For the year ended December 31, 2022, the company's research and development costs were approximately $194,000.

Government Regulation

Dietary Supplement Regulation

The U.S. Food and Drug Administration (FDA) regulates dietary supplements, such as Viactiv chews, as 'dietary supplements' under the Federal Food, Drug, and Cosmetic Act (FDCA) as a distinct, sub-category of 'food'.

History

The company was founded in 2009. It was incorporated in 2015 in California as a limited liability company under the name P4L Health Sciences, LLC and subsequently changed its name to Guardion Health Sciences, LLC. In 2015, the company converted from a California limited liability company to a Delaware corporation and changed its name to Guardion Health Sciences, Inc.