GHSI Guardion Health Sciences Inc

 

 

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 March 31, 2024

 

OR

 

☐ 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 May 1, 2024, there were 1,284,156 shares of the Company’s common stock, par value $0.001 per share, issued and outstanding.

 

 

 

TABLE OF CONTENTS

 

			Page No.
PART I – FINANCIAL INFORMATION
ITEM 1.	CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)		4
	Condensed Consolidated Balance Sheets –March 31, 2024 (Unaudited) and December 31, 2023		4
	Condensed Consolidated Statements of Operations (Unaudited) – Three Months Ended March 31, 2024 and 2023		5
	Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) – Three Months Ended March 31, 2024 and 2023		6
	Condensed Consolidated Statements of Cash Flows (Unaudited) – Three Months Ended March 31, 2024 and 2023		7
	Notes to Condensed Consolidated Financial Statements (Unaudited) – Three Months Ended March 31, 2024 and 2023		8
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		19
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		25
ITEM 4.	CONTROLS AND PROCEDURES		25
PART II – OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS		26
ITEM 1A.	RISK FACTORS		26
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		33
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES		33
ITEM 4.	MINE SAFETY DISCLOSURES		33
ITEM 5.	OTHER INFORMATION		33
ITEM 6.	EXHIBITS		33
SIGNATURES			34

 

 

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. 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

 

		March 31, 2024				December 31
		(Unaudited)				2023
Assets
Current assets
Cash and cash equivalents		$	5,605,035			$	6,359,646
Accounts receivable, net			2,103,325				2,274,394
Inventories, net			2,134,213				2,677,112
Prepaid expenses and other current assets			539,209				573,780
Total current assets			10,381,782				11,884,932
Property and equipment, net			25,089				33,245
Total assets		$	10,406,871			$	11,918,177
Liabilities, Preferred Stock and Stockholders’ Equity
Current liabilities
Accounts payable		$	413,294			$	614,122
Accrued expenses			857,805				704,912
Total current liabilities			1,271,099				1,319,034
Warrant derivative liability – long-term			5,721,688				2,453,100
Total liabilities			6,992,787				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 issued and outstanding at March 31, 2024 and December 31, 2023, respectively			1,284				1,275
Additional paid-in capital			101,725,811				101,711,035
Accumulated deficit			(98,313,011	)			(93,566,267	)
Total stockholders’ equity			3,414,084				8,146,043
Total liabilities, preferred stock and stockholders’ equity		$	10,406,871			$	11,918,177

 

See accompanying notes to condensed consolidated financial statements.

 

 

Guardion Health Sciences, Inc.

Condensed Consolidated Statements of Operations (Unaudited)

 

		2024				2023
		Three Months Ended March 31,
		2024				2023
Revenue
Nutritional supplements		$	2,918,526			$	3,091,447
Ocular products			81,119				94,242
Total revenue			2,999,645				3,185,689
Cost of goods sold
Nutritional supplements			1,776,479				1,781,827
Ocular products			44,167				68,560
Total cost of goods sold			1,820,645				1,850,387
Gross Profit			1,179,000				1,335,302
Operating expenses
Research and development			3,168				62,734
Sales and marketing			361,908				598,655
General and administrative			1,834,669				2,050,252
Transaction costs related to pending disposition of business			529,690				87,668
Loss on disposal of fixed assets			3,366				-
Total operating expenses			2,732,801				2,799,309
Loss from operations			(1,553,801	)			(1,464,007	)
Other income (expense):
Change in fair value of warrant derivative liability			(3,268,588	)			1,898,100
Interest income, net			75,645				98,998
Total other income (expense)			(3,192,943	)			1,997,098
Net income (loss)		$	(4,746,744	)		$	533,091
Net income (loss) per common share – basic and diluted		$	(3.71	)		$	0.42
Weighted average common shares outstanding – basic and diluted			1,280,306				1,267,340

 

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 Ended March 31, 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	)		$	3,414,084

 

		Three Months Ended March 31, 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
Balance			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
Net income (loss)			-				-				-				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

 

See accompanying notes to condensed consolidated financial statements.

 

 

Guardion Health Sciences, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

		2024				2023
		Three Months Ended
		March 31,
		2024				2023
Operating Activities
Net income (loss)		$	(4,746,744	)		$	533,091
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization			4,790				4,792
Loss on disposal of fixed asset			3,366				-
Fair value of vested stock options			12,615				25,182
Fair value of vested restricted common stock			2,170				5,329
Change in fair value of warrant derivative liability			3,268,588				(1,898,100	)
Changes in operating assets and liabilities:
(Increase) decrease in:
Accounts receivable			171,069				(22,393	)
Inventories			542,899				58,501
Prepaid expenses			34,571				97,235
Increase (decrease) in:
Accounts payable			(200,828	)			(629,483	)
Operating lease liability			-				(3,807	)
Accrued expenses			152,893				(49,557	)
Net cash used in operating activities			(754,611	)			(1,879,210	)
Investing Activities
Purchase of property and equipment			-				(1,654	)
Net cash used in investing activities			-				(1,654	)
Financing Activities
Redemption of preferred stock			-				(5,250,000	)
Net cash used in financing activities			-				(5,250,000	)
Cash and cash equivalents:
Net decrease in cash and cash equivalents			(754,611	)			(7,130,864	)
Balance at beginning of period			6,359,646				15,905,490
Balance at end of period		$	5,605,035			$	8,774,626
Supplemental disclosure of cash flow information:
Cash paid for:
Income taxes		$	-			$	-
Interest		$	-			$	-

 

See accompanying notes to condensed consolidated financial statements.

 

 

Guardion Health Sciences, Inc.

Notes to Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2024 and 2023

(Unaudited)

 

1. Organization and Business Operations

 

Business

 

Guardion Health Sciences, Inc. (the “Company”) is a clinical nutrition company that develops and distributes clinically supported dietary supplements. The Company offers a portfolio of science-based, clinically supported products designed to support consumers, healthcare professionals and providers, and their patients.

 

Pending Disposition of Substantially all of the Company’s Business and Operations

 

On January 30, 2024, the Company, Viactiv Nutritionals, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (“Viactiv”), and Activ Nutritional LLC, a Delaware limited liability corporation, which is wholly-owned by Viactiv (“Activ”), entered into an Equity Purchase Agreement (the “Agreement”) with Doctor’s Best Inc., a Delaware corporation (“Doctor’s Best”). Pursuant to the Agreement, Doctor’s Best agreed to acquire all of the outstanding equity interests of Activ from Viactiv (the “Transaction”) for aggregate cash consideration to the Company of $17,200,000 and subject to the terms and conditions contained in the Agreement.

 

Activ owns the Company’s Viactiv® brand and business, which accounted for 97.3% and 97.0% of the Company’s total operating revenue for the three months ended March 31, 2024 and 2023, respectively, and 97.2% and 96.3% of the Company’s total operating revenue for the years ended December 31, 2023 and 2022, respectively. See Note 9 for additional information with regard to this Transaction.

 

Nasdaq Listing and Reverse Stock Split

 

The Company’s common stock is traded on the Nasdaq Capital Market (“Nasdaq”) under the symbol “GHSI”. On January 6, 2023, the Company effected a 1-for-50 reverse split of its outstanding shares of common stock in order to remain in compliance with the $1.00 minimum closing bid price requirement of Nasdaq. However, there can be no assurances that the Company will be able to remain in compliance with the $1.00 minimum closing bid price requirement of Nasdaq over time, or that it will be successful in maintaining compliance with any of the other continued listing requirements of Nasdaq.

 

Liquidity

 

For the three months ended March 31, 2024, the Company incurred a net loss of $(4,746,744), a loss from operations of $(1,553,801), and used cash in operating activities of $(754,611). The Company has a history of operating losses and negative cash flows. Even though the Company’s management identified certain indicators including, among others, the current period loss from operations, the potential impact of inflation and general economic uncertainty, and the continuing costs with respect to the pending sale of its Viactiv brand and business, management concluded these indicators do not raise substantial doubt regarding the Company’s ability to continue as a going concern within one year after the date these financial statements are issued. As of March 31, 2024, the Company had $5,605,035 of cash, and working capital (including cash) of $9,110,684, and management determined that it is probable that the Company will be able to fund its current operating plan and meet all of its obligations due within one year from the date these financial statements are issued.

 

However, this determination is 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 which involve unknown risks and uncertainties that may individually or materially impact the matters discussed herein for a variety of reasons that are outside the control of the Company. These matters include, but are not limited to, the pending sale of the Viactiv brand and business, including whether the sale is approved by the stockholders of the Company at its upcoming Special Meeting of Stockholders scheduled for May 23, 2024 (the “Special Meeting”), whether the sale is closed on an expeditious basis, and whether the voluntary plan of liquidation and dissolution (the “Plan of Liquidation and Dissolution”) is approved by stockholders at the Special Meeting or any adjournment thereof. Any or all of these factors could adversely impact the Company’s operating cash flows in future periods. On April 8, 2024, the Company filed a Definitive Proxy Statement with the United States Securities and Exchange Commission (the “SEC”) in order to solicit the approval of the Company’s stockholders of record on April 5, 2024 in connection with the Plan of Liquidation and Dissolution.

 

8

 

In the event that the Transaction does not close, the amount and timing of future cash requirements will depend, in part, on the Company’s ability to ultimately achieve operating profitability. The Company expects to continue to incur net losses and negative operating cash flows in the near-term and will continue to incur significant expenses for the development, commercialization and distribution of its clinical nutrition products (including the Viactiv® product line) and the successful development and commercialization of new products and product lines. The Company may also utilize cash to fund acquisitions of complementary businesses, product lines or brands.

 

In the event that the Transaction does not close, the Company may seek to raise additional debt and/or equity capital to fund future operations, but there can be no assurances that the Company will be able to secure such additional financing in the amounts necessary to fully fund its operating requirements on acceptable terms or at all. If the Company is unable to access sufficient capital resources on a timely basis, the Company may be forced to reduce or discontinue its product development programs or curtail or cease operations.

 

The continuing impact of the actions by the Federal Reserve to address inflation, most notably increases in interest rates, rising energy prices and increasing labor costs create uncertainty about the future economic environment which will continue to evolve and, we believe, has impacted the Company’s business in 2023 and 2024, and will continue to impact business during the remainder of 2024. The implications of higher government deficits and debt, tighter monetary policy, and potentially higher long-term interest rates may drive a higher operating costs for the business.

 

2. Summary of Significant Accounting Policies

 

Basis of Presentation

 

The unaudited condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) pursuant to the applicable rules and regulations of the SEC for interim financial information. The unaudited condensed consolidated financial statements have been prepared on the same basis as the Company’s annual financial statements for the year ended December 31, 2023 and, in the opinion of management, reflect all adjustments, which consist of normal recurring adjustments, considered necessary for a fair presentation of the periods presented. The results of operations for the interim periods presented are not necessarily indicative of the results of operations to be expected for the full fiscal year ending December 31, 2024. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as filed with the SEC. The condensed consolidated balance sheet as of December 31, 2023 was derived from the audited consolidated financial statements as of that date, but does not include all disclosures, including notes, required by GAAP.

 

Principles of Consolidation

 

The unaudited consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Viactiv Nutritionals, Inc. and NutriGuard Formulations, Inc. All intercompany balances and transactions have been eliminated in consolidation.

 

Segment Information

 

The Company operates and reports in one segment, which consists of the development and distribution of clinically supported dietary supplements. The Company’s operating segment is reported in a manner consistent with the internal reporting provided to the Company’s Chief Operating Decision Maker, which is the Company’s President and Chief Executive Officer.

 

9

 

Use of Estimates

 

The preparation of the Company’s financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities. Actual results could differ from those estimates. On an ongoing basis, management reviews its estimates and if deemed appropriate, those estimates are adjusted. Significant estimates include those related to assumptions used in valuing inventories at net realizable value, assumptions used in valuing stock-based compensation, the valuation allowance for deferred tax assets, accruals for potential liabilities, and assumptions used in the determination of the Company’s liquidity. Actual results could differ materially from those estimates.

 

Revenue Recognition

 

Revenue and costs of sales are recognized when control of the products transfers to our customer, which generally occurs upon delivery to the customer. The Company’s performance obligations are satisfied at that time. The Company does not have any significant contracts with customers requiring performance beyond delivery, and contracts with customers contain no incentives or discounts that could cause revenue to be allocated or adjusted over time. Shipping and handling activities are performed before the customer obtains control of the goods and therefore represent a fulfillment activity rather than a promised service to the customer.

 

All products sold by the Company are distinct individual products and are offered for sale as finished goods only, and there are no performance obligations required post-shipment for customers to derive the expected value from them. Contracts with customers contain no incentives or discounts that could cause revenue to be allocated or adjusted over time.

 

Historically the Company has not experienced any significant payment delays from customers.

 

In certain circumstances, returns of products are allowed. Due to the insignificant amount of historical returns, the stand-alone nature of our products, and our assessment of performance obligations and transaction pricing for our sales contracts the Company does not currently maintain a contract asset or liability balance for obligations. The Company assesses its contracts and the reasonableness of our conclusions on a quarterly basis.

 

At March 31, 2024 and December 31, 2023, the allowance for doubtful accounts was $0 and $1,840, respectively.

 

Revenue by product:

 Schedule of Revenues by Product

		2024				2023
		Three Months Ended March 31,
		2024				2023
Nutritional supplements		$	2,918,526			$	3,091,447
Ocular products			81,119				94,242
Revenue by product		$	2,999,645			$	3,185,689

 

Third-Party Outsourcing

 

The Company derives substantially all of its revenue from the sale of products using a third-party fulfillment center to provide order processing and sales fulfillment, customer invoicing and collections, and product warehousing. Substantially all of the Company’s products are shipped through the third-party fulfillment center to the customer. Shipping charges to customers are included in revenues. In addition, the Company uses the third-party fulfillment center to provide sales and inventory management, and certain marketing and promotional services.

 

The Company outsources the production of substantially all of its products with a third party that manufactures and packages the finished products under a product supply agreement.

 

10

 

Costs incurred related to third-party outsourcing, which includes manufacturing, order processing and fulfillment, customer invoicing, collections and warehousing, were approximately $1,509,600 and $1,937,000 for the three months ended March 31, 2024 and 2023, respectively.

 

Cost of Goods Sold

 

Cost of goods sold is comprised of the costs for third-party contract manufacturing, packaging, manufacturing fees, and in-bound freight charges.

 

Shipping Costs

 

Shipping costs associated with product distribution after manufacture are included as part of cost of goods sold. Shipping and handling expense totaled $102,435 and $146,820 for the three months ended March 31, 2024 and 2023, respectively.

 

Advertising Costs

 

Advertising costs are expensed as incurred and are included in sales and marketing expense. Advertising costs were $337,364 and $479,866 for the three months ended March 31, 2024 and 2023, respectively.

 

Concentrations

 

Revenue. During the three months ended March 31, 2024, the Company had two customers that accounted for an aggregate of 72% of total revenue. The largest customer accounted for 46% of the Company’s total revenue, the second largest customer accounted for 26% of the Company’s total revenue. During the three months ended March 31, 2023, the Company had three customers that accounted for 80% of the Company’s total revenue. The largest customer accounted for 59% of the Company’s total revenue, the second largest customer accounted for 11% of the Company’s total revenue and the third largest customer accounted for 10% of the Company’s revenue. No other customer accounted for more than 10% of revenue during the three months ended March 31, 2024 and 2023.

 

Accounts receivable. As of March 31, 2024, the Company had accounts receivable from two customers which comprised approximately 81% of its accounts receivable. The largest customer accounted for 61% of the accounts receivable total and the other customer accounted for 20%. As of December 31, 2023, the Company had accounts receivable from one customer which comprised approximately 57% of its accounts receivable and one customer that accounted for 18% of its accounts receivable. No other customer accounted for more than 10% of accounts receivable as of March 31, 2024 and December 31, 2023.

 

Purchases from vendors. During the three months ended March 31, 2024 and 2023, the Company utilized one manufacturer for most of its production and packaging of its dietary supplement products. Total purchases from this manufacturer accounted for approximately 40% of all purchases during the three months ended March 31, 2024 and approximately 49% of all purchases during the three months ended March 31, 2023. The Company utilized a firm to manage and handle media and advertising of its dietary supplement products. Total purchases from this vendor accounted for approximately 10% and 13% of all purchases during the three months ended March 31, 2024 and 2023, respectively. No other vendors accounted for more than 10% of purchases during the three months ended March 31, 2024 and 2023.

 

Accounts payable. As of March 31, 2024, two vendors accounted for 82% of total accounts payable. One vendor accounted for 72% and a second vendor accounted for 10% of the accounts payable at March 31, 2024. As of December 31, 2023, one vendor accounted for 91% of the total accounts payable. No other vendor accounted for more than 10% of accounts payable as of March 31, 2024 and December 31, 2023.

 

Cash and cash equivalents. Cash and cash equivalents consist of funds deposited with BMO Harris Bank(“BMO”), a major, established, high quality financial institution in short-term (original maturity of generally 60 days or less) liquid investments in money market deposit accounts. Cash equivalents are classified as Level 1 in the GAAP valuation hierarchy and are valued using the net asset value (“NAV”) per share of the money market fund. The Company has an overnight investment feature established with BMO whereby the Company’s cash is swept into a Money Market Mutual Fund managed by Goldman Sachs Asset Management. This fund invests solely in high quality U.S. government issued securities. As of March 31, 2024, $5,605,035 included in cash and cash equivalents was held in the Goldman Sachs Financial Square Government Institutional Fund, a fund that is not insured by the Federal Deposit Insurance Corporation (the “FDIC”).

 

11

 

The Company routinely has cash balances in financial institutions in excess of the FDIC and SIPC insurance limits of $250,000 and $500,000, respectively. The Company believes that no significant concentration of credit risk exists with respect to its cash balances because of its assessment of the creditworthiness and financial viability of the financial institutions that hold such cash balances. The Company has not experienced any losses to date resulting from this policy.

 

Stock-Based Compensation

 

Stock-based awards for stock options and restricted stock awards to employees and non-employees are accounted for using the fair value method in accordance with ASC 718, Compensation – Stock Compensation. The estimated fair value of stock options granted to employees in exchange for services is measured at the grant date, using a fair value-based method, such as a Black-Scholes option valuation model, and is recognized as an expense on a straight-line basis over the requisite service periods. The assumptions used in the Black-Scholes option pricing model such as risk-free interest rates, expected volatility, expected life, and future dividends could materially affect compensation expense recorded in future periods. The fair value of restricted stock units is measured at the grant date based on the closing market price of the Company’s common stock on the date of grant and is recognized as an expense on a straight-line basis over the requisite service periods. Recognition of compensation expense for non-employees is accounted for in the same period and manner as if the Company had paid cash for the services.

 

Income (Loss) per Common Share

 

Basic income (loss) per share is computed by dividing net loss by the weighted-average common shares outstanding during the period, excluding shares of unvested restricted common stock outstanding. Diluted earnings per share is computed based on the weighted-average common shares outstanding plus the effect of dilutive potential common shares outstanding during the period calculated using the treasury stock method. Shares of vested restricted stock are included in the diluted weighted average number of common shares outstanding from the date they are vested. Dilutive potential common shares include shares from unexercised warrants and options. Potential common share equivalents have been excluded where their inclusion would be anti-dilutive. The Company experienced a net loss for the three months ended March 31, 2024 and net income for the three months ended March 31, 2023. Although the Company reported net income for the three months ended March 31, 2023, using the treasury stock method for the period from January 1, 2023 to the redemption of the preferred stock on February 8, 2023, under the most advantageous pricing approach, there was no material change to the diluted net income per share as reported.

 

The following potentially dilutive shares were excluded from the shares used to calculate diluted earnings per share:

 Schedule of Anti-dilutive Securities Excluded from Computation of Earnings per Share

		2024				2023
		March 31,
		2024				2023
Warrants			736,438				1,526,701
Options			20,577				12,459
Unvested restricted common stock			333				667
Anti-dilutive securities			757,348				1,539,827

 

Fair Value of Financial Instruments

 

Accounting standards require certain assets and liabilities to be reported at fair value in the financial statements and provide a framework for establishing that fair value. Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. When determining fair value, the Company considers the principal or most advantageous market in which it transacts and considers assumptions that market participants would use when pricing the asset or liability. The framework for determining fair value is based on a hierarchy that prioritizes the inputs and valuation techniques used to measure fair value:

 

Level 1 – Quoted prices in active markets for an identical asset or liability that the Company has the ability to access as of the measurement date.

 

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Level 2 – Inputs, other than quoted prices included within Level 1, which are directly observable for the asset or liability or indirectly observable through corroboration with observable market data.

 

Level 3 – Unobservable inputs in which there is little or no market data for the asset or liability which requires the reporting entity to develop its own assumptions.

 

The Company determines the level in the fair value hierarchy within which each fair value measurement falls in its entirety, based on the lowest level input that is significant to the fair value measurement in its entirety. In determining the appropriate levels, the Company performs an analysis of the assets and liabilities at each reporting period end.

 

The following table sets forth by level, within the fair value hierarchy, the Company’s financial assets at fair value as of March 31, 2024 and December 31, 2023:

 Schedule of Assets and Liabilities at Fair Value

		Level 1				Level 2				Level 3				Total
		March 31, 2024
		Level 1				Level 2				Level 3				Total
Assets		$	-			$	-			$	-			$	-
Total assets		$	-			$	-			$	-			$	-
Liabilities
Warrant derivative liability		$	-			$	-			$	5,721,688			$	5,721,688
Total liabilities		$	-			$	-			$	5,721,688			$	5,721,688

 

		Level 1				Level 2				Level 3				Total
		December 31, 2023
		Level 1				Level 2				Level 3				Total
Assets		$	-			$	-			$	-			$	-
Total assets		$	-			$	-			$	-			$	-
Liabilities
Warrant derivative liability		$	-			$	-			$	2,453,100			$	2,453,100
Total liabilities		$	-			$	-			$	2,453,100			$	2,453,100

 

The following table provides a roll-forward of the warrant derivative liability measured at fair value on a recurring basis using unobservable level 3 inputs for the three months ended March 31, 2024 as follows:

 Schedule of Warrant Derivative Liability Measured at Fair Value

		March 31, 2024
Balance as of beginning of period – December 31, 2023		$	2,453,100
Change in fair value of warrant derivative liability			3,268,588
Balance as of end of period – March 31, 2024		$	5,721,688

 

As of March 31, 2024 and December 31, 2023, the Company’s outstanding warrants were treated as derivative liabilities and changes in the fair value were recognized in the statement of operations (see Note 5).

 

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The Company believes the carrying amounts of certain financial instruments, including cash, accounts receivable, and accounts payable and accrued liabilities, approximate fair value due to the short-term nature of such instruments and are excluded from the fair value tables above.

 

Recent Accounting Pronouncements

 

In November 2023, the Financial Accounting Standards board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure (“ASU 2023-07”), which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expense categories that are regularly provided to the chief operating decision maker and included in each reported measure of a segment’s profit or loss. ASU-2023-07 also requires all annual disclosures about a reportable segment’s profit or loss and assets to be provided in interim periods and for entities with a single reportable segment to provide all the disclosures required by ASC 280, Segment Reporting, including the significant segment expense disclosures. The Company adopted ASU 2023-07 effective January 1, 2024, and there was no material impact on the Company’s financial position, results of operations and cash flows.

 

Other recent accounting pronouncements and guidance issued by FASB, its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

 

3. Inventories

 

Inventories are stated at the lower of cost (first-in, first-out) or net realizable value and consisted of the following:

 Schedule of Inventories

		March 31,				December 31,
		2024				2023
Raw materials		$	35,405			$	35,404
Finished products			2,098,808				2,641,708
Inventories, net		$	2,134,213			$	2,677,112

 

4. Operating Leases

 

The Company leases its corporate office space located in Houston, Texas, with lease payments of approximately $3,000 per month under a month-to-month lease. Leases with the duration of less than 12 months are not recognized on the balance sheet and are expensed on a straight-line basis over the lease term.

 

5. Warrant Derivative Liability

 

At March 31, 2024 and December 31, 2023, the Company had 690,100 and 740,000 Series A warrants outstanding, respectively, exercisable at $7.57 per share (the “Series A Warrants”), which expire in February 2027. The Series A Warrants contain certain anti-dilution provisions, including a down round provision and certain cash redemption rights.

 

In addition, the Series A Warrants contain a provision which requires that the exercise price of such warrants be adjusted to the volume weighted average price of the Company’s common stock for the five trading days immediately following effectiveness of a reverse stock split if such calculation resulted in an exercise price below the then-current exercise price. The Company determined that this provision represented a variable that is not an input to the fair value of a “fixed-for-fixed” option as defined under ASC 815-40, and thus the Series A Warrants are not considered indexed to the Company’s own stock and not eligible for an exception from derivative accounting. Accordingly, the Series A warrants are classified as a derivative liability. In January 2023, in conjunction with the effectiveness of the Company’s reverse stock split, the exercise price of the Series A warrants was adjusted downward to $7.57 per share.

 

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The fair value of the warrant liability at March 31, 2024 and at December 31, 2023 was $5,721,688 and $2,453,100, respectively. The estimated fair value of the warrants is determined using Level 3 inputs. Inherent in a binomial lattice model are assumptions related to expected probability of event occurrence, including stock splits, stock-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its common stock warrants based on the Company’s historical volatility. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant or valuation date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the Company’s historical rate, which the Company anticipates remaining at zero. The derivative liabilities were valued using a binomial lattice model with the following assumptions:

 Schedule of Warrant Derivative Liability

		Series A Warrants
		March 31, 2024				December 31, 2023
Common stock market price		$	9.09			$	5.34
Exercise price			7.57				7.57
Expected term (in years)			2.9				3.15
Expected volatility			191.60	%			97.60	%
Expected dividend yield			-				-
Risk-free interest rate			4.40	%			4.10	%
Total fair value		$	5,721,688			$	2,453,100

 

6. Redeemable Preferred Stock (Temporary Equity, redeemed in full in February 2023)

 

On November 29, 2022, the Company issued and sold, in a private placement, 495,000 shares of the Company’s Series C Convertible Redeemable Preferred Stock (the “Series C Preferred Stock”), and 5,000 shares of the Company’s Series D Redeemable Preferred Stock (the “Series D Preferred Stock,” and together with the Series C Preferred Stock, the “Preferred Stock”). During the three months ended March 31, 2023, the Preferred Stock was redeemed in full for $5,250,000 cash, consisting of $4,750,000 in gross proceeds from the issuance of the Preferred Stock, plus an additional $500,000 to fund a 105% redemption price. There were no conversions of the Preferred Stock into common stock.

 

7. Stockholders’ Equity

 

Common Stock

 

The Company is authorized to issue 250,000,000 shares of common stock, par value $0.001 per share. As of March 31, 2024 and December 31, 2023, there were 1,284,156 shares and 1,275,238 shares of common stock issued and outstanding.

 

Warrants

 

A summary of the Company’s warrant activity is as follows:

 

Schedule of Warrants Activity

		Shares				Weighted Average Exercise Price				Weighted Average Remaining Contractual Term (Years)
December 31, 2023			786,701			$	8.96				3.12
Granted			-				-				-
Forfeitures			-				-				-
Expirations			(363	)			-				-
Exercised			(49,900	)			-				-
March 31, 2024, all exercisable			736,438			$	9.00				2.87

 

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The exercise prices of warrants outstanding and exercisable as of March 31, 2024 are as follows:

 

Schedule of Exercise Price of Warrants Outstanding and Exercisable

Warrants Outstanding and Exercisable (Shares)				Exercise Prices
	727,100			$	7.57
	9,338			$	120.00
	736,438

 

During the three months ended March 31, 2024, 49,900 Series A Warrants were exercised on a cashless basis, resulting in the issuance of 8,918 shares of common stock. Based on the closing price of the Company’s common stock on March 31, 2024 of $9.02 per share, the aggregate intrinsic value of warrants outstanding as of March 31, 2024 was $1,054,295.

 

Stock Options

 

A summary of the Company’s stock option activity is as follows:

 

Schedule of Share-based Compensation, Stock Options, Activity

		Shares				Weighted Average Exercise Price				Weighted Average Remaining Contractual Term (Years)
December 31, 2023			20,577			$	77.72				7.60
Granted			-				-				-
Forfeitures			-				-				-
Expirations			-				-				-
Exercised			-				-				-
March 31, 2024, outstanding			20,577			$	77.72				7.39
March 31, 2024, exercisable			13,153			$	116.19				6.76

 

The exercise prices of options outstanding and exercisable as of March 31, 2024 are as follows:

 

Schedule of Exercise Price of Options Outstanding and Exercisable

Options Outstanding (Shares)				Options Exercisable (Shares)				Exercise Prices
	10,000				3,750			$	6.01
	1,344				1,344				7.35
	1,344				504				7.78
	841				841				45.50
	1,002				668				80.50
	1,008				1,008				88.00
	840				840				116.70
	336				336				162.33
	3,862				3,862				300.00
	20,577				13,153

 

The Company accounts for share-based payments in accordance with ASC 718, Compensation – Stock Compensation, wherein grants are measured at the grant date fair value and charged to operations ratably over the vesting periods.

 

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During the three months ended March 31, 2024 and 2023, there were no grants of options to purchase shares of common stock.

 

The Company computes stock price volatility over expected terms based on its historical common stock trading prices. The risk-free interest rate was based on rates established by the Federal Reserve Bank. The expected dividend yield was based on the fact that the Company has not paid dividends to its common stockholders in the past and does not expect to pay dividends to its common stockholders in the future. The expected life of the stock options granted is estimated using the “simplified” method, whereby the expected term equals the average of the vesting term and the original contractual term of the stock option.

 

For the three months ended March 31, 2024 and 2023, the Company recognized aggregate share-based compensation expense of $12,615 and $25,182, respectively, related to the fair value of vested options.

 

As of March 31, 2024, the Company had an aggregate of 7,424 remaining unvested options outstanding, with a remaining fair value of approximately $123,000 to be amortized over an average of 4.5 years. Based on the closing price of the Company’s common stock on March 31, 2024 of $9.02 per share, the aggregate intrinsic value of options outstanding as of March 31, 2024 was $34,138.

 

Restricted Common Stock

 

During the three months ended March 31, 2024 and 2023, there were no grants of restricted common stock.

 

During the three months ended March 31, 2024 and 2023, the Company recognized share-based compensation expense of $2,170 and $5,329, respectively, related to vested restricted shares. At March 31, 2024, there was $2,170 of unvested compensation related to the non-vested shares that will be amortized over a remaining vesting period of 0.25 years.

 

The following table summarizes restricted common stock activity for the three months ended March 31, 2024:

 

Schedule of Non Vested Restricted Common Stock Activity

		Number of shares				Fair value of shares
Non-vested shares, December 31, 2022			333			$	80.50
Granted			-				-
Vested			-				-
Forfeited			-				-
Non-vested shares, March 31, 2023			333			$	80.50

 

8. Income Taxes

 

During the three months ended March 31, 2024 and 2023, the Company did not record any provision for income taxes, as the Company incurred losses during such periods. Deferred tax assets and liabilities reflect the net tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company has recorded a full valuation allowance against its deferred tax assets for all periods presented as the Company currently believes it is more likely than not that the deferred tax assets will not be realized.

 

9. Commitments and Contingencies

 

Legal Proceedings

 

The Company is periodically the subject of various pending or threatened legal actions and claims arising out of its operations in the normal course of business. In the opinion of the management of the Company, adequate provision has been made in the Company’s financial statements at March 31, 2024 and December 31, 2023 with respect to any such matters.

 

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The Company is not currently a party to any material legal proceedings and is not aware of any pending or threatened legal proceeding against the Company that the Company believes could have a material adverse effect on its business, operating results, cash flows or financial condition.

 

Pending Disposition of Substantially all of the Company’s Business and Operations

 

On January 30, 2024, the Company, Viactiv Nutritionals, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (“Viactiv”), and Activ Nutritional LLC, a Delaware limited liability corporation, which is wholly-owned by Viactiv (“Activ”), entered into an Equity Purchase Agreement (the “Agreement”) with Doctor’s Best Inc., a Delaware corporation (“Doctor’s Best”). Pursuant to the Agreement, Doctor’s Best agreed to acquire all of the outstanding equity interests of Activ from Viactiv (the “Transaction”) for aggregate cash consideration to the Company of $17,200,000 (the “Base Purchase Price”), with $1,700,000 of the Base Purchase Price being placed in a third-party escrow account pursuant to the terms of the Agreement, and the Base Purchase Price being subject to adjustment as provided in the Agreement based upon the working capital of Activ at the time of closing (the “Closing”). Doctor’s Best is a wholly-owned subsidiary of Kingdomway USA Corp., the U.S. subsidiary holding company of Xiamen Kingdomway Group Company, which is listed on the Shenzhen Stock Exchange.

 

The Agreement contains customary representations, warranties and covenants regarding the parties thereto. The Closing is subject to the satisfaction or waiver of certain customary closing conditions, including, but not limited to, the approval of the transaction by the requisite vote of the Company’s stockholders. The Agreement also contains customary termination provisions and mutual indemnification obligations.

 

The Series A Warrant agreement (see Note 5) contains a cash settlement provision whereby the holders of the warrants can elect to settle the warrants for cash based on the Black-Scholes value of the warrant, as defined, upon the occurrence of certain fundamental transactions, as defined, such as a change of control, or the sale or disposition of all or substantially all of the Company’s assets. Management believes that the pending disposition described above, if consummated, would meet the definition of a fundamental transaction and would result in the Company being required to purchase the Series A Warrants from the holders by cash payment equal to the Black-Scholes value of the Series A warrants.

 

Management currently estimates that the liability to the Company associated with these warrants based on information currently available to the Company is approximately $5,700,000. That amount could increase or decrease based on a number of factors that are outside the control of the Company. Such factors include, among others, the trading and price volatility of the Company’s common stock, the number of warrant holders that may elect to exercise their warrants in accordance with their terms prior to the closing of the Transaction and forego their put rights, and the number of warrant holders that exercise their put rights in accordance with the terms of the warrants. To the extent that this obligation is triggered and exercised by the warrant holders, the Company would need to make such payments out of its available cash and/or the Transaction proceeds, and any such payments will reduce the amount each Company stockholder would be able to receive from any liquidating distributions.

 

In the event that the Company’s stockholders approve the transaction at its upcoming Special Meeting of Stockholders scheduled for May 23, 2024 (the “Special Meeting”), and the transaction closes, the Company would be left with minimal operations. The Board of Directors has determined that it is advisable and in the best interests of the Company and the its stockholders to approve a voluntary dissolution and liquidation of the Company pursuant to a Plan of Liquidation and Dissolution, which, if approved, would authorize the Company to liquidate and dissolve in accordance with its terms, but such decision would be subject to the Company’s ability to abandon or delay the Plan of Dissolution in the event that the Board of Directors determines that another transaction would be in the best interests of the Company’s stockholders. Assuming the approval of the Plan of Liquidation and Dissolution by the Company’s stockholders at the Special Meeting, the decision of whether or not to proceed with the dissolution and when to file the Certificate of Dissolution will be made by the Board of Directors in its sole discretion.

 

10. Subsequent Events

 

The Company performed an evaluation of subsequent events through the date of filing of these condensed consolidated financial statements with the SEC. Other than disclosed below, there were no material subsequent events which affected, or could affect, the amounts or disclosures in the condensed consolidated financial statements.

 

On April 8, 2024, the Company filed a Definitive Proxy Statement with the SEC in order to solicit the approval of the Company’s stockholders of record on April 5, 2024 in connection with the Transaction and the Plan of Liquidation and Dissolution.

 

 

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

 

You should read the following discussion and analysis of our financial condition and results of operations together with and our financial statements and the related notes appearing elsewhere in this Quarterly Report on Form 10-Q. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk Factors” included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as may be amended, supplemented or superseded from time to time by other reports we file with the SEC. All amounts in this report are in U.S. dollars, unless otherwise noted.

 

As used in this Quarterly Report on Form 10-Q, the terms “we,” “us” “our” and the “Company” mean Guardion Health Sciences, Inc., individually, or as the context requires, collectively with its subsidiaries.

 

Overview

 

We are a clinical nutrition company that develops and distributes clinically supported dietary supplements. The Company offers a portfolio of science-based, clinically supported products 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.

 

Recent Developments

 

Agreement to Sell Activ Nutritional LLC

 

On January 30, 2024, the Company, Viactiv Nutritionals, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (“Viactiv”), and Activ Nutritional LLC, a Delaware limited liability corporation, which is wholly-owned by Viactiv (“Activ”), entered into an Equity Purchase Agreement (the “Agreement”) with Doctor’s Best Inc., a Delaware corporation (“Doctor’s Best”). Pursuant to the Agreement, Doctor’s Best agreed to acquire all of the outstanding equity interests of Activ from Viactiv (the “Transaction”) for aggregate cash consideration to the Company of $17,200,000 (the “Base Purchase Price”), with $1,700,000 of the Base Purchase Price being placed in a third-party escrow account pursuant to the terms of the Agreement, and the Base Purchase Price being subject to adjustment as provided in the Agreement based upon the working capital of Activ at the time of closing (the “Closing”). Doctor’s Best is a wholly-owned subsidiary of Kingdomway USA Corp., the U.S. subsidiary holding company of Xiamen Kingdomway Group Company, which is listed on the Shenzhen Stock Exchange.

 

The sale of Activ, as contemplated by the Purchase Agreement (the “Transaction”), is conditioned upon receiving approval from our stockholders, and such approval is also required under Delaware law, as the sale of Activ, which owns the Viactiv® brand and business, accounted for 97.2% and 96.3% of our total operating revenue for the years ended December 31, 2023, and 2022, respectively, and 97.3% and 97.0% of our total operating revenue for the three months ended March 31, 2024 and 2023, respectively, and thus constitutes a sale of substantially all of our assets and revenue-generating operations. The Transaction contemplated by the Purchase Agreement is the result of a broad review of strategic alternatives by our board of directors (the “Board”). The Board has determined that it is advisable and in the best interests of the Company and the Company’s stockholders to approve the Transaction. In the event that the Transaction closes, the Company will be left with minimal operations.

 

The Series A Warrant agreement contains a cash settlement provision whereby the holders of the warrants can elect to settle the warrants for cash based on the Black-Scholes value of the warrant, as defined, upon the occurrence of certain fundamental transactions, as defined, such as a change of control, or the sale or disposition of all or substantially all of the Company’s assets. Management believes that the pending disposition described above, if consummated, would meet the definition of a fundamental transaction and would result in the Company being required to purchase the Series A Warrants from the holders by cash payment equal to the Black-Scholes value of the Series A warrants.

 

 

Management currently estimates that the liability to the Company associated with these warrants based on information currently available to the Company is approximately $5,700,000. That amount could increase or decrease based on a number of factors that are outside the control of the Company. Such factors include, among others, the trading and price volatility of the Company’s common stock, the number of warrant holders that may elect to exercise their warrants in accordance with their terms prior to the closing of the Transaction and forego their put rights, and the number of warrant holders that exercise their put rights in accordance with the terms of the warrants. To the extent that this obligation is triggered and exercised by the warrant holders, the Company would need to make such payments out of its available cash and/or the Transaction proceeds, and any such payments will reduce the amount each Company stockholder would be able to receive from any liquidating distributions.

 

Potential Dissolution

 

In the event that the Company’s stockholders approve the Transaction and the Transaction closes, the Board has determined that it is advisable and in the best interests of the Company and the Company’s stockholders to approve a voluntary dissolution and liquidation of the Company (the “Dissolution”) pursuant to a plan of dissolution (the “Plan of Dissolution”), which, if approved, will authorize the Company to liquidate and dissolve the Company in accordance with the Plan of Dissolution, but subject to the Company’s ability to abandon or delay the Plan of Dissolution in the event that the Board determines that another transaction would be in the best interest of the Company’s stockholders and further in accordance with the terms thereof. Assuming the approval of the Dissolution by the Company’s stockholders, the decision of whether or not to proceed with the Dissolution and when to file the Certificate of Dissolution will be made by the Board in its sole discretion.

 

On April 8, 2024, the Company filed a Definitive Proxy Statement with the United States Securities and Exchange Commission (the “SEC”) in order to solicit the approval of the Company’s stockholders of record on April 5, 2024 in connection with the Transaction and the Dissolution.

 

Current Business Operations

 

In June 2021, the Company acquired Activ Nutritional, LLC (“Activ” or “Viactiv”, as the context requires). The acquisition and integration of the Viactiv product line changed our financial position, market profile and brand and operating focus.

 

For the three months ended March 31, 2024, Viactiv generated net revenues of $2,918,526, which accounted for 97.3% of our total revenues. For the three months ended March 31, 2023, Viactiv generated net revenues of $3,091,447, which accounted for 97.0% of our total revenues.

 

In order to leverage the Viactiv platform, the Company has continued its focus on new product development and distribution expansion. The Company has added two new products to the Viactiv product line in 2024. In March 2024, the Company introduced a clinically tested 600mg dose form of the Omega Boost Gel Bites product. The current 1200mg dose form of the Omega Boost Gel Bites product will be relaunched as a maximum formula to differentiate it from the 600mg dose offering. In addition to the innovation in the omega-3 segment, the Company launched a magnesium citrate soft chew in April 2024. Both new Viactiv products are available on viactiv.com and on the Amazon platform.

 

Distribution of Viactiv products, primarily calcium soft chews, is expected to increase during the three months ending June 30, 2024 as a result of the roll-out of approximately 1,200 new distribution points across three grocery chains. In addition, Viactiv products have been listed by a new e-commerce customer that is expected to result in greater online availability of the brand’s products.

 

To support our ocular business, we reformulated and relaunched Lumega-Z in March 2024 as a drink mix powder at a lower retail price versus the prior liquid formulation to support our current customers and to appeal to new customers. Lumega-Z is available on guardionhealth.com.

 

 

Strategic Objectives, Goals and Strategies

 

We believe that our ability to maximize stockholder value requires that we build a solid corporate foundation and demonstrate growth and commercial success on top of that foundation. We have taken a number of steps over the last two years to strengthen our corporate foundation, including acquiring Viactiv, winding down under-performing assets and operations, hiring key team members, launching new products, strengthening our eCommerce capabilities and streamlining operations.

 

Nasdaq Listing and Reverse Stock Split

 

The Company’s common stock is traded on the Nasdaq Capital Market (“Nasdaq”) under the symbol “GHSI”. On January 6, 2023, the Company effected a 1-for-50 reverse split of its outstanding shares of common stock in order to remain in compliance with the $1.00 minimum closing bid price requirement of Nasdaq. However, there can be no assurances that the Company will be able to remain in compliance with the $1.00 minimum closing bid price requirement of Nasdaq over time, or that it will be successful in maintaining compliance with any of the other continued listing requirements of Nasdaq.

 

Concentration of Risk

 

Information with respect to concentration of risk is provided at Note 2 to the condensed consolidated financial statements for the three months ended March 31, 2024 and 2023 included elsewhere in this Quarterly Report on Form 10-Q.

 

Critical Accounting Policies and Estimates

 

The preparation of our consolidated financial statements in conformity with generally accepted accounting principles in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Some of those judgments can be subjective and complex, and therefore, actual results could differ materially from those estimates under different assumptions or conditions. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates. Significant estimates include those related to assumptions used in valuing inventories at net realizable value, assumptions used in valuing assets acquired in business acquisitions, impairment testing of goodwill and other long-term assets, assumptions used in valuing stock-based compensation, the valuation allowance for deferred tax assets, accruals for potential liabilities, and assumptions used in the determination of the Company’s liquidity. There were no changes to our critical accounting policies described in the consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 that impacted our condensed consolidated financial statements and related notes included herein.

 

Recent Accounting Pronouncements

 

Information with respect to recent accounting pronouncements is provided at Note 2 to the condensed consolidated financial statements for the three months ended March 31, 2024 and 2023 included elsewhere in this Quarterly Report on Form 10-Q.

 

Recent Trends – Market Conditions

 

The Company, along with our suppliers, continue to experience significant broad-based inflation and labor cost pressures. We expect input cost inflation to continue through at least the remainder of 2024. The consequences of higher government deficits and debt, tighter monetary policy, and potentially the continuation of higher long-term interest rates may result in a higher cost of capital for the business and an increase in our operating expenses. Based on industry data, unit volume for vitamins, minerals and supplements has softened in recent months and we expect that may continue in upcoming quarters. We believe that the impact of inflation-based cost increases on the purchasing power of consumers, in combination with the implementation of higher retail prices across brands in the vitamins, minerals and supplements category, is contributing to the softness.

 

 

We believe that store traffic in the drug channel has declined due to a decrease in the number of people choosing to have a COVID-19 shot, which results in less traffic to such retail stores. Large retailers, such as Rite Aid and CVS have announced or are in the process of executing significant store-closure programs. The Company has experienced an increase in its Amazon business which may, in part, result from the decline in retail store traffic.

 

Results of Operations

 

Through March 31, 2024, we have primarily been engaged in product development and marketing, commercialization of our products and improving our operating efficiencies. We have incurred, and will continue to incur, significant expenditures for the commercialization and development of our products.

 

Comparison of Three Months Ended March 31, 2024 and 2023

 

		Three Months Ended March 31,
		2024				2023				Change
Revenue		$	2,999,645			$	3,185,689			$	(186,044	)			(5.8	)%
Cost of goods sold			1,820,645				1,850,387				(29,742	)			(1.6	)%
Gross Profit			1,179,000				1,335,302				(156,302	)			(11.7	)%
Operating Expenses:
Sales and marketing			361,908				598,655				(236,747	)			(39.5	)%
General and administrative and other			2,367,725				2,137,920				229,805				10.7	%
Research and development			3,168				62,734				(59,566	)			(95.0	)%
Total operating expense			2,732,801				2,799,309				(66,508	)			(2.4	)%
Loss from Operations			(1,553,801	)			(1,464,007	)			89,794				6.1	%
Other Income (Expense):
Change in fair value of warrant derivative liability			(3,268,588	)			1,898,100				(5,166,688	)			(272.2	)%
Interest income			75,645				98,998				(23,352	)			(23.6	)%
Total Other Income (Expense)			(3,192,943	)			1,997,098				(5,190,040	)			(259.9	)%
Net Income (Loss)		$	(4,746,744	)		$	533,091			$	(5,279,835	)			(990.4	)%

 

Revenue

 

For the three months ended March 31, 2024, revenue from product sales was $2,999,645, as compared to $3,185,689 for the three months ended March 31, 2023, a decrease of $186,044 or 5.8%. The primary reason for the decrease in the period ended March 31, 2024, was phasing of shipments caused by customers pulling forward orders into December 2023 from January 2024 . In addition, the contract manufacturer utilized for Viactiv products experienced unplanned delays in the supply of primary packaging materials throughout the quarter which impacted the Company’s ability to fulfill purchase orders across the Viactiv® product line. A supply chain solution was executed by the contract manufacturer at the end of March enabling the Company to start rebuilding inventory to meet customer needs.

 

Cost of Goods Sold

 

For the three months ended March 31, 2024, cost of goods sold was $1,820,645, as compared to $1,850,387 for the three months ended March 31, 2023, a decrease of $29,742 or 1.6%. This decrease was primarily driven by the decrease in revenue from our Viactiv line of products for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023.

 

 

Gross Profit

 

For the three months ended March 31, 2024, gross profit was $1,179,000, as compared to $1,335,302 for the three months ended March 31, 2023, a decrease of $156,302 or 11.7%. This decrease was primarily driven by the decrease in sales during the three months ended March 31, 2024. During the three months ended March 31, 2024, our gross profit percentage was 39.3%, as compared to a gross profit percentage of 41.9% for the three months ended March 31, 2023. The reduction in our gross profit was primarily caused by a decrease in revenue while cost of goods sold remained relatively constant during the three months ended March 31, 2024, as compared to the three months ended March 31, 2023.

 

Sales and Marketing

 

For the three months ended March 31, 2024, sales and marketing expenses were $361,908 as compared to $598,655 for the three months ended March 31, 2023, a decrease of $236,747, or 39.5%. The decrease was primarily attributable to managing consumer demand relative to the availability of inventory during the delay in receipt of packaging materials at the contract manufacturing facility during the three months ended March 31, 2024. Sales and marketing costs are primarily attributable to the Viactiv product line and consist mainly of advertising expenses related to our calcium and Omega Boost Gel Bites products.

 

General and Administrative and other

 

For the three months ended March 31, 2024, general and administrative and other expenses were $2,367,725 as compared to $2,137,920 for the three months ended March 31, 2023, an increase of $229,805 or 10.7%. The increase in 2024 was primarily driven by an increase of $584,437 in legal fees and other professional fees associated with the Activ Nutritional LLC transaction and the Special Meeting, mostly offset by a decrease in franchise tax expense of $199,449 and payroll expense of $124,955.

 

Loss from Operations

 

Loss from operations for the three months ended March 31, 2024 was $(1,553,801) as compared to $(1,464,007) for the three months ended March 31, 2023.

 

Change in Fair Value of Warrant Derivative Liability

 

For the three months ended March 31, 2024, the change in the fair value of warrant derivative liabilities related to the Series A warrants was a loss of $3,268,588 as compared to a gain of $1,898,100 for the three months ended March 31, 2023, a decrease of $5,166,688.

 

Net Income (Loss)

 

For the three months ended March 31, 2024, we incurred a net loss of $(4,746,744), as compared to net income of $533,091 for the three months ended March 31, 2023.

 

Liquidity and Capital Resources

 

For the three months ended March 31, 2024, we incurred a net loss of $(4,746,744), a loss from operations of $(1,553,801), and used cash in operating activities of $(754,611). At March 31, 2024, we had cash and cash equivalents of $5,605,035 and working capital (including cash) of $9,110,684.

 

The Company has a history of operating losses and negative cash flows. The Company expects to continue to incur net losses and negative operating cash flows in the near-term. Even though the Company’s management identified certain indicators including, among others, the current period loss from operations, the potential impact of inflation and general economic uncertainty, and the continuing costs with respect to the pending sale of its Viactiv brand and business, management concluded these indicators do not raise substantial doubt regarding the Company’s ability to continue as a going concern within one year after the date these financial statements are issued. As of March 31, 2024, management determined that it is probable that the Company will be able to fund its current operating plan and meet all of its obligations due within one year from the date these financial statements are issued.

 

 

However, this determination is 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 which involve unknown risks and uncertainties that may individually or materially impact the matters discussed herein for a variety of reasons that are outside the control of the Company. These matters include, but are not limited to, the pending sale of the Viactiv brand and business, including whether the sale is approved by the stockholders of the Company at its upcoming Special Meeting of Stockholders scheduled for May 23, 2024 (the “Special Meeting”), whether the sale is closed on an expeditious basis, and whether the voluntary plan of liquidation and dissolution is approved by stockholders at the Special Meeting or any adjournment thereof. Any or all of these factors could adversely impact the Company’s operating cash flows in future periods.

 

Our financing has historically come primarily from the sale of common and preferred stock. We will continue to incur significant expenses for continued commercialization activities related to our clinical nutrition product lines and building our infrastructure. Development and commercialization of clinical nutrition products involves a lengthy and complex process. Additionally, our long-term viability and growth may depend upon the successful acquisition, development and commercialization of new complementary products or product lines.

 

Sources and Uses of Cash and Cash Equivalents

 

The following table sets forth the Company’s major sources and uses of cash and cash equivalents for each of the following periods:

 

		Three Months Ended March 31,
		2024				2023
Net cash used in operating activities		$	(754,611	)		$	(1,879,210	)
Net cash used in investing activities			-				(1,654	)
Net cash used in financing activities			-				(5,250,000	)
Net decrease in cash and cash equivalents		$	(754,611	)		$	(7,130,864	)

 

Operating Activities

 

Net cash used in operating activities was $754,611 during the three months ended March 31, 2024, as compared to $1,879,210 for the three months ended March 31, 2023. The decrease of $1,124,599 in cash used in operating activities was primarily due to a decrease in inventories and accounts receivable.

 

Investing Activities

 

Net cash provided by investing activities was $0 for the three months ended March 31, 2024, as compared to net cash used in investing activities in the amount of $1,654 for the three months ended March 31, 2023. Cash used in investing activities during the three months ended March 31, 2023 was for the purchase of property and equipment.

 

Financing Activities

 

Net cash used in financing activities was $0 for the three months ended March 31, 2024. Net cash used in financing activities for the three months ended March 31, 2023 was $5,250,000 and was used to repay in full the holders of the Company’s Preferred Stock issued in November 2022.

 

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

As we are a “smaller reporting company”, as defined in Rule 12b-2 of the Exchange Act we are not required to provide the information required by this Item.

 

ITEM 4. CONTROLS AND PROCEDURES

 

Disclosure Controls and Procedures

 

Under the supervision and with the participation of our senior management, consisting of our Chief Executive Officer and Chief Accounting Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this report (the “Evaluation Date”). Based on that evaluation, the Company’s management concluded that as of March 31, 2024, our disclosure controls and procedures were effective.

 

Changes in Internal Control Over Financial Reporting

 

There have been no changes in our internal control over financial reporting during our most recent three months ended March 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

Limitations on Effectiveness of Controls and Procedures

 

In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

 

 

 

PART II – OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

The Company is not currently a party to any material legal proceedings and is not aware of any pending or threatened legal proceeding or claim against the Company that the Company believes could have a material adverse effect on its business, operating results, cash flows or financial condition. The Company is periodically the subject of various pending or threatened legal actions and claims arising out of its operations in the normal course of business. Regardless of the outcome, such proceedings or claims can have a material adverse impact on the Company because of defense and settlement costs, diversion of resources and other factors, and there can be no assurances that favorable outcomes will be obtained.

 

ITEM 1A. RISK FACTORS

 

Risk factors that affect our business and financial results are discussed in Part I, Item 1A “Risk Factors,” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as filed with the SEC (“Annual Report”). There have been no material changes in our risk factors from those previously disclosed in our Annual Report, other than as described herein and below. You should carefully consider the risks described in our Annual Report, which could materially affect our business, financial condition or future results. The risks described in our Annual Report are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and/or operating results. If any of the risks actually occur, our business, financial condition, and/or results of operations could be negatively affected.

 

Risks Related to the Company’s Business

 

Inflationary Pressures

 

The Company and its suppliers are experiencing significant broad-based inflation of manufacturing and distribution costs as well as transportation challenges. The Company expects input cost inflation to continue at least throughout 2024. If we are unable to successfully manage the effects of inflation, our business, operating results, cash flows and financial condition may be adversely affected. Additionally, there have been various economic indicators that the United States economy may be at risk of a recession in upcoming quarters. An economic recession could potentially impact the general business environment and the capital markets, which may have a material negative impact on our financial results.

 

Risk Factors Relating to the Proposal to Approve the Transaction to Sell Activ

 

If we fail to complete the Transaction, our business may be harmed

 

We cannot provide assurances that the Transaction will be completed. The closing of the Transaction is subject to a number of conditions, including but not limited to our obtaining stockholder approval of the Purchase Agreement and the absence of a material adverse effect on Activ’s business. If the Transaction is terminated because certain triggering events occur, we would then be required to pay to Doctor’s Best a termination fee of $688,000.

 

As a result of our announcement of the Transaction, third parties may be unwilling to enter into material agreements with us. New or existing customers and business partners may prefer to enter into agreements with our competitors who have not expressed an intention to sell their business because customers and business partners may perceive that such relationships with our competitors are likely to be more stable in the long-term. If we fail to complete the Transaction, the failure to maintain existing business relationships or enter into new ones could adversely affect our business, results of operations and financial condition. In addition, if the Transaction is not completed, the market price for our common stock may decline.

 

Our announcement of the Transaction may cause employees working for us to become concerned about the future of the business and lose focus or seek other employment.

 

 

In addition, if the Transaction is not completed, our directors, executive officers and other employees will have expended extensive time and effort and experienced significant distractions from their work during the pendency of the Transaction and we will have incurred significant third-party transaction costs, in each case, without any commensurate benefit, which may have a material and adverse effect on our stock price and results of operations.

 

If the Transaction is not completed, we may explore other potential transactions involving the Company, in whole or in part. The terms of an alternative transaction may be less favorable to us than the terms of the Transaction and there can be no assurance that we will be able to reach agreement with or complete an alternative transaction with another party.

 

The amount of net proceeds that we will receive from the Transaction is subject to uncertainties.

 

We will receive aggregate cash consideration of $17,200,000, subject to certain upward adjustments related to cash holdings and working capital in excess of a target of $3,677,000, certain downward adjustments related to indebtedness, unpaid transaction expenses, and working capital below a target of $3,677,000. However, there can be no assurance that our closing working capital will be at or above the target of $3,677,000. If the adjustment amount, as finally determined, is less than the estimated adjustment amount plus $100,000, Doctor’s Best will receive from the escrow fund the amount of such shortfall. If the adjustment amount, as finally determined, equals or exceeds the estimated adjustment amount plus $100,000, Doctor’s Best will pay us any excess in an amount not to exceed $225,000. The amount of our working capital at any given point in time is dependent upon a number of factors beyond our control. For example, the timing of cash payments for purchases and receipts for accounts receivable cannot be predicted precisely, our inventory levels vary according to customer orders and prepayments and accruals fluctuate throughout the year. We may also have unforeseen liabilities and expenses that must be satisfied from the after-tax net proceeds of the Transaction. As a result, the amount of the net proceeds from the Transaction is subject to substantial uncertainty, and it is possible that the net proceeds from the Transaction will be materially less than we expect. Additionally, if the adjustment amount, as finally determined, is less than the estimated adjustment amount plus $100,000, Doctor’s Best will receive from the escrow fund the amount of such shortfall. If the adjustment amount, as finally determined, equals or exceeds the estimated adjustment amount plus $100,000, Doctor’s Best will pay us any excess in an amount not to exceed $225,000. Further, the amount of any distribution from the proceeds of the Transaction may be reduced due to the option of the Series A Warrant holders to exercise their respective repurchase rights to cause the Company to repurchase such warrants from the holders for cash.

 

If the Transaction is approved and consummated, Nasdaq may delist our shares from trading on its exchange, which could limit our stockholders’ ability to make transactions in our shares and subject us to additional trading restrictions.

 

We are required to demonstrate compliance with Nasdaq’s continued listing requirements in order to maintain the listing of our shares on Nasdaq. Such continued listing requirements for our shares include, among other things, having at least 300 shareholders, 500,000 publicly held shares and a market value of our listed publicly held shares of $1,000,000. In addition, a Nasdaq-listed company must meet at least one of the following standards: (i) stockholders equity of at least $2,500,000; (ii) market value of listed shares of at least $35,000,000; or (iii) net income from continuing operations of $500,000 in the latest fiscal year or in two of the last three fiscal years. We cannot assure you that our shares will be able to meet any of Nasdaq’s continued listing requirements. If our shares do not meet the Nasdaq’s continued listing requirements, Nasdaq may delist our shares from trading on its exchange, which could limit investors’ ability to make transactions in our shares and subject us to additional trading restrictions.

 

If our shares do not meet Nasdaq’s continued listing requirements, Nasdaq may delist our shares from trading on its exchange. If Nasdaq delists any of our shares from trading on its exchange and we are not able to list such shares on another approved national securities exchange, we expect that such shares could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including: (i) a limited availability of market quotations for our shares, (ii) reduced liquidity for our shares, (iii) a determination that our shares are “penny stocks” which will require brokers trading in our shares to adhere to more stringent rules, including being subject to the depository requirements of Rule 419 of the Securities Act, and possibly result in a reduced level of trading activity in the secondary trading market for our shares, (iv) a decreased ability to issue additional shares or obtain additional financing in the future, (v) a less attractive acquisition vehicle to a target business in connection with an initial business combination, (vi) our ability to complete an initial business combination with a target company contemplating a Nasdaq listing, and (vii) a limited amount of news and analyst coverage.

 

 

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as covered securities. Our shares qualify as covered securities under such statute. If we were no longer listed on Nasdaq, our shares would not qualify as covered securities under such statute and we would be subject to regulation in each state in which we offer our shares.

 

If we are delisted from Nasdaq, but obtain a substitute listing for our common stock, it will likely be on a market with less liquidity, and therefore potentially experience more price volatility than our common stock experienced on Nasdaq. Stockholders may not be able to sell their shares of common stock on any such substitute market in the quantities, at the times, or at the prices that could potentially be available on a more liquid trading market. As a result of these factors, if our common stock is delisted from Nasdaq, the value and liquidity of our common stock and warrants would likely be significantly adversely affected. A delisting of our common stock from Nasdaq could also adversely affect our ability to obtain financing for our operations and/or result in a loss of confidence by investors, employees and/or business partners.

 

Even if our stockholders approve the Transaction, Doctor’s Best may be unable to secure the necessary cash to fund the purchase price.

 

Doctor’s Best has represented to the Company in the Purchase Agreement that it will be able to fund the cash purchase price at closing. In order to mitigate any risk associated with Doctor’s Best’s ability to fund the closing purchase price, the Company and Doctor’s Best agreed in the Purchase Agreement, among other things, that Doctor’s Best would deliver (i) at signing, a consent of MUFG Union Bank to the transaction with MUFG Union Bank’s approval of the draw to fund the purchase price (the “MUFG Consent”) in a form satisfactory to the Company, and (ii) a weekly certificate during the interim period from the signing of the Purchase Agreement to the closing of the Transaction pursuant to which the Chief Financial Officer of Doctor’s Best must certify that Doctor’s Best has adequate capacity under its credit facility to fund the purchase price (the “Weekly Certificate”). Doctor’s Best failed to deliver the MUFG Consent at signing but subsequently delivered the MUFG Consent on February 29, 2024. Additionally, Doctor’s Best has periodically failed to deliver certain of the Weekly Certificates when required.

 

Further, Doctor’s Best has indicated to the Company’s management and advisors that it may utilize cash from its parent-group entities in China in order to fund the purchase price. Approvals from or registration with appropriate government and regulatory authorities may be required with respect to remitting cash out of China and/or converting any cash from China into United States dollars. Doctor’s Best is required to pay the cash purchase price at closing in order for the Transaction to be completed, subject to a thirty (30) day cure period. As a result of its potential financing uncertainty, if Doctor’s Best is unable to obtain or utilize its financing options in the United States, its ability to pay the cash purchase price may be delayed or inhibited. Under the Purchase Agreement, if the Company terminates the Purchase Agreement due to Doctor’s Best’s failure to fund the cash purchase price at closing, then the parties are obligated to release $1,700,000, representing the full amount held in escrow, plus any interest and earnings accrued thereon, to the Company.

 

The Company will not have any material business or operations following the consummation of the Transaction.

 

The Viactiv® brand and business accounted for 97.2% and 96.3% of our revenues for the years ended December 31, 2023 and 2022, respectively, and 97.3% and 97.0% of our revenues for the three months ended March 31, 2024 and 2023, respectively. As a result, the sale of Activ to Doctor’s Best constitutes a sale of substantially all of our assets and revenue-generating operations. Following the consummation of the Transaction, the remaining ocular products business will not be material.

 

 

Risk Factors Related to the Plan of Dissolution

 

If our stockholders vote against the Plan of Dissolution proposal, our business could be harmed, and our stockholders could face adverse tax consequences.

 

If we do not obtain stockholder approval of the Plan of Dissolution proposal, we would have to continue our business operations despite the sale of substantially all of our assets and our announced Dissolution. Assuming the completion of the Transaction, our remaining business assets would not be material and as a result we would have limited assets with which to generate operating revenue and likely will have retained only those employees required to wind-up our corporate existence. Further, we do not intend to invest in another operating business following the closing of the Transaction. Our stockholders could incur an increased stockholder-level tax liability from any distribution made outside the Plan of Dissolution.

 

We cannot determine at this time the exact amount or timing of any distributions to stockholders because there are many factors, some of which are outside of our control, which could affect our ability to make such distributions in the future.

 

If the Transaction is approved, we expects to receive aggregate cash consideration of $17,200,000, subject to certain upward adjustments related to cash holdings and working capital in excess of a target of $3,677,000, certain downward adjustments related to indebtedness, unpaid transaction expenses, and working capital below a target of $3,677,000. However, there can be no assurance that our closing working capital will be at or above the target of $3,677,000. If the adjustment amount, as finally determined, is less than the estimated adjustment amount plus $100,000, Doctor’s Best will receive from the escrow fund the amount of such shortfall. If the adjustment amount, as finally determined, equals or exceeds the estimated adjustment amount plus $100,000, Doctor’s Best will pay us any excess in an amount not to exceed $225,000.

 

Assuming the Plan of Dissolution is approved by stockholders, and subject to the possibility that the Board abandons or delays the effectiveness of the Plan of Dissolution in favor of a separate subsequent transaction involving the Company that the Board determines to be in the best interest of the Company and its stockholders, we plan to distribute, in an initial distribution (with potential subsequent distributions thereafter), a portion of the net proceeds from the Transaction, which may include a portion of the Company’s other cash on its balance sheet, subject to the Company’s obligations to warrant holders and a contingency reserve for remaining costs and liabilities, after the filing of the Certificate of Dissolution with the Delaware Secretary of State. The amount and timing of the distributions to stockholders will be determined by the Board in its sole discretion, subject to the provisions of the Plan of Dissolution. Subsequent distributions would be made in such amounts and at such times as determined by the Board in its sole discretion in accordance with the Plan of Dissolution. However, there can be no assurance as to the timing and amount of distributions to stockholders, even if all of our remaining assets are sold because there are many factors, some of which are outside of our control, that could affect our ability to make such distributions in the future. Further, the Board may, in its sole discretion, take into account the timing of liquidating distributions or potential transactions when determining whether to make a distribution to stockholders following the consummation of the Transaction, if approved. If the Board, in its sole discretion, determines to promptly proceed with liquidating the Company’s assets pursuant to the Plan of Dissolution, if approved, then the Board may, in its sole discretion, elect not to proceed with initial distributions prior to such liquidating distributions due to the administrative costs and burdens involved. However, if the Board expects to engage in a potential transaction following the consummation of the Transaction, if approved, rather than proceeding with the dissolution of the Company, the Board may elect, in its sole discretion, to make interim distributions to the Company’s stockholders.

 

If stockholders do not approve the Plan of Dissolution, the Company will seek to complete the Transaction, if the Transaction is approved by the stockholders and the other conditions to closing set forth in the Purchase Agreement are satisfied or waived. In that event, the Company will have transferred substantially all of its operating assets to Doctor’s Best and will have limited operations and working capital resources to generate revenue and fund overhead. With limited operations and working capital resources with which to generate revenues and no Plan of Dissolution approved, the Company anticipates that it would use its cash to pay ongoing operating expenses, and the Board would determine whether to make any distributions to stockholders. The Board would have to evaluate the alternatives available to the Company, including, among other things, the possibility of investing the cash received from the Transaction in another operating business, engage in a reverse merger or recapitalization or other strategic transaction. In the event that we make a distribution outside of the Plan of Dissolution, our stockholders could incur an increased stockholder-level tax liability from such distribution.

 

 

In addition, we will continue to incur claims, liabilities and expenses from operations (including various operating costs, salaries, directors and officers insurance, payroll and local taxes, legal and accounting fees, and miscellaneous office and operating expenses) as we seek to close the Transaction and effect the Dissolution. Our estimates regarding our expense levels may be inaccurate. Any unexpected claims, liabilities or expenses that arise prior to the liquidation and final dissolution of the Company or any claims, liabilities or expenses that exceed our estimates could leave us with less cash than is necessary to pay liabilities and expenses and would likely reduce the amount of cash available for ultimate distribution to our stockholders. Further, if cash to be received from the sale of our remaining assets is not adequate to provide for all of our obligations, liabilities, expenses and claims, we will not be able to distribute any amount at our stockholders. Further, the amount of any distribution from the proceeds of the Transaction may be reduced due to the option of the Series A Warrant holders to exercise their respective repurchase rights to cause the Company to repurchase such warrants from the holders for cash.

 

For the foregoing reasons, there can be no assurance as to the timing and amount of distributions to stockholders, even if all of our remaining asset are sold or otherwise disposed of; provided that the Company must complete the distribution of all of its properties and assets to its stockholders as provided in the Plan of Distribution as soon as practicable following the filing of the Certificate of Dissolution with the Delaware Secretary of State and in any event on or before the tenth anniversary of such filing.

 

Our Board may abandon or delay implementation of the Plan of Dissolution even if it is approved by our stockholders.

 

Our Board has adopted and approved a Plan of Dissolution for the Dissolution of the Company following the closing of the Transaction. Even if the Plan of Dissolution proposal is approved by our stockholders, the Board has reserved the right, in its sole discretion, to abandon or delay implementation of the Plan of Dissolution if as a result of the Plan of Dissolution (i) we would be insolvent or unable to pay our debts as they come due, (ii) we would have remaining liabilities in excess of the Company’s remaining assets, (iii) we would otherwise be unable to satisfy in full all valid claims against the Company (iv) the Board determined to invest the cash received from the Transaction in another operating business, or (v) the Board abandons or delays the effectiveness of the Plan of Dissolution in favor of a separate subsequent transaction involving the Company that the Board determines to be in the best interest of the Company and its stockholders. Following completion of the Transaction, we will continue to exist as a public company until we are dissolved. The Board may also conclude either that its fiduciary obligations require it to pursue business opportunities that present themselves or that abandoning the Plan of Dissolution is otherwise in our best interests and the best interests of our stockholders. If the Board elects to pursue any alternative to the Plan of Dissolution, the value of our common stock may decline.

 

Our stock transfer books will close on the date we file the Certificate of Dissolution with the Secretary of State of the State of Delaware, after which it will not be possible for stockholders to trade our stock.

 

We will close our stock transfer books and discontinue recording transfers of our common stock at the close of business on the date we file the Certificate of Dissolution with the Secretary of State of the State of Delaware, which is referred to herein as the final record date. Thereafter, certificates representing shares of our common stock will not be assignable or transferable on our books. The proportionate interests of all of our stockholders will be fixed on the basis of their respective stock holdings at the close of business on the final record date, and, after the final record date, any distributions made by us shall be made solely to the stockholders of record at the close of business on the final record date.

 

We will continue to incur claims, liabilities and expenses and a delay in the consummation of the Transaction and/or Dissolution will reduce the amount available for distribution to stockholders.

 

Claims, liabilities and expenses from operations, such as operating costs, salaries, insurance, payroll and local taxes, legal, accounting and consulting fees and miscellaneous expenses, will continue to be incurred as we wind down. These expenses will reduce the amount of assets available for ultimate distribution to stockholders.

 

 

If the Company is not dissolved, the SEC could classify the Company as a shell company, which could result in certain negative consequences, including a delisting of our common stock on Nasdaq.

 

If the Plan of Dissolution is not approved and/or the Company is not dissolved, then the SEC could take the position that the Company is a shell company. Recently, the SEC has exercised heightened scrutiny in classifying companies as “shell companies” under Rule 405 of the Securities Act. This classification by the SEC would prohibit the Company from using Form S-3 “shelf registration” to register securities for public offerings until 12 months after it has ceased to be a shell company. Further, the Company would no longer be able to use Rule 144 for 12 months after it ceases to be a shell company, among other rules and regulations of which we would not be able to take advantage. Shell company status could dissuade certain parties from looking to acquire the Company in a change in control transaction in an effort to avoid SEC scrutiny and potentially onerous reporting requirements. In addition to the scrutiny and obligations the Company would have pursuant to federal securities laws and regulations as a result of such a classification by the SEC, we could be delisted from Nasdaq.

 

We are required to demonstrate compliance with Nasdaq’s continued listing requirements in order to maintain the listing of our securities on Nasdaq. Such continued listing requirements for our securities include, among other things, having at least 300 shareholders, 500,000 publicly held shares and a market value of our listed publicly held securities of $1,000,000. We cannot assure you that our shares will be able to meet any of Nasdaq’s continued listing requirements. If our securities do not meet the Nasdaq’s continued listing requirements, including as a result of the Company’s potential shell company status following the consummation of the Transaction, Nasdaq may delist our securities from trading on its exchange, which could limit the ability of investors to make transactions in our securities and subject us to additional trading restrictions.

 

If our securities do not meet Nasdaq’s continued listing requirements, Nasdaq may delist our securities from trading on its exchange. If Nasdaq delists any of our securities from trading on its exchange and we are not able to list such securities on another approved national securities exchange, we expect that such securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including: (i) a limited availability of market quotations for our securities, (ii) reduced liquidity for our securities, (iii) a determination that our shares are “penny stocks” which will require brokers trading in our shares to adhere to more stringent rules, including being subject to the depository requirements of Rule 419 of the Securities Act, and possibly result in a reduced level of trading activity in the secondary trading market for our securities, (iv) a decreased ability to issue additional securities or obtain additional financing in the future, (v) a less attractive acquisition vehicle to a target business in connection with an initial business combination, (vi) our ability to complete an initial business combination with a target company contemplating a Nasdaq listing, including the Business Combination and (vii) a limited amount of news and analyst coverage.

 

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as covered securities. Our shares qualify as covered securities under such statute. If we were no longer listed on Nasdaq, our securities would not qualify as covered securities under such statute and we would be subject to regulation in each state in which we offer our securities under each states respective “blue sky” securities laws.

 

If stockholders do not approve the Plan of Dissolution, the Company will still seek to complete the Transaction, if the Transaction is approved by the stockholders and the other conditions to closing set forth in the Purchase Agreement are satisfied or waived, in which case any distribution to our stockholders may be reduced or eliminated.

 

In the event that our stockholders do not approve the Plan of Dissolution, we will still seek to complete the Transaction, if the Transaction is approved by the stockholders and the other conditions to closing set forth in the Purchase Agreement are satisfied or waived. In that event, the Company will have transferred substantially all of its operating assets to Doctor’s Best and will have limited operations and working capital resources to generate revenue and to fund its ongoing expenses. With limited assets with which to generate revenues and no Plan of Dissolution approved, the Company anticipates that it would use its cash to pay ongoing operating expenses, and the Board would determine whether to make any distributions to stockholders. The Board would have to evaluate the alternatives available to the Company, including, among other things, acquiring other businesses, investing the cash received from the Transaction in another operating business, or engaging in a subsequent reverse merger or recapitalization or similar transaction. In the event that we make a distribution outside of the Plan of Dissolution, our stockholders could incur an increased stockholder-level tax liability from such distribution.

 

 

If our warrant holders exercise their respective put rights triggered by the Transaction being deemed a fundamental transaction under our Series A Warrants, we will be obligated to pay such exercising holders’ cash, which would reduce the amount each Company stockholder would receive from a liquidating distribution.

 

In connection with our February 2022 public offering, we issued the Series A Warrants to purchase shares of our common stock. Such warrants contain a provision which provides that in the event of a fundamental transaction, such as a change-in-control transaction or sale of all or substantially all of the Company’s assets, the holder has the option, exercisable at any time concurrently with, or within 30 days after the consummation of the fundamental transaction, to cause the Company to repurchase such warrants from the holders for cash in an amount equal to the Black-Scholes value of such warrant calculated in accordance with the terms of the warrant.

 

We currently estimate that the liability to the Company associated with these warrants based on information currently available to the Company is approximately $5,700,000. That amount could increase or decrease based on a number of factors that are outside the control of the Company. Such factors include, among others, the trading and price volatility of our common stock, the number of warrant holders that may elect to exercise their warrants in accordance with their terms prior to the closing of the Transaction and forego their put rights, and the number of warrant holders that exercise their put rights in accordance with the terms of the warrants. To the extent that this obligation is triggered and exercised by the warrant holders, the Company would need to make such payments out of its available cash and/or the Transaction proceeds, and any such payments would reduce the amount each stockholder would be able to receive from any liquidating distributions.

 

Such warrant holders are also able to exercise their warrants in exchange for common stock of the Company. Any such exercise would decrease the aforementioned liability of the Company but would result in dilution to the common stock held by all other stockholders.

 

Risks Related to the Company’s Common Stock

 

We are currently listed on The Nasdaq Capital Market. If we are unable to maintain listing of our securities on Nasdaq or any stock exchange, our stock price could be adversely affected and the liquidity of our stock and our ability to obtain financing could be impaired and it may be more difficult for our shareholders to sell their securities.

 

Although our common stock is currently listed on The Nasdaq Capital Market, we may not be able to continue to meet the exchange’s minimum listing requirements or those of any other national exchange. If we are unable to maintain listing on Nasdaq or if a liquid market for our common stock does not develop or is sustained, our common stock may remain thinly traded.

 

The Listing Rules of Nasdaq require listing issuers to comply with certain standards in order to remain listed on its exchange. If, for any reason, we should fail to maintain compliance with these listing standards and Nasdaq should delist our securities from trading on its exchange and we are unable to obtain listing on another national securities exchange, a reduction in some or all of the following may occur, each of which could have a material adverse effect on our shareholders:

 

	●	the liquidity of our common stock;
	●	the market price of our common stock;
	●	our ability to obtain financing for the continuation of our operations;
	●	the number of investors that will consider investing in our common stock;
	●	the number of market makers in our common stock;
	●	the availability of information concerning the trading prices and volume of our common stock; and
	●	the number of broker-dealers willing to execute trades in shares of our common stock.

 

 

 

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

 

None.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

ITEM 5. OTHER INFORMATION

 

During the three months ended March 31, 2024, no director or officer (as defined in Rule 16a-1(f) under the Exchange Act) of the Company adopted or terminated a “Rule 10b5-1 trading arrangement”, as such term is defined in Item 408(a) of Regulation S-K.

 

ITEM 6. EXHIBITS

 

Exhibit No.		Description
3.1		Delaware Certificate of Incorporation and amendment thereto (filed with the Company’s Registration Statement on Form S-1 filed with the SEC on February 11, 2016 and incorporated herein by reference)
3.2		Certificate of Amendment to Certificate of Incorporation (filed with the Company’s Current Report Form 8-K on February 1, 2019 and incorporated herein by reference)
3.3		Certificate of Amendment to Certificate of Incorporation (filed with the Company’s Current Report on Form 8-K filed with the SEC on December 10, 2019 and incorporated herein by reference)
3.4		Second Amended and Restated Bylaws (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 22, 2019)
3.5		Amendment No. 1 to Second Amended and Restated Bylaws (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 14, 2022)
3.6		Certificate of Amendment to Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on January 6, 2023)
3.7		Certificate of Designation of Series C Convertible Redeemable Preferred Stock (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 2, 2022)
3.8		Certificate of Designation of Series D Convertible Redeemable Preferred Stock (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the SEC on December 2, 2022)
10.1		Equity Purchase Agreement by and among Doctor’s Best Inc., Activ Nutritional, LLC, Viactiv Nutritionals, Inc. and Guardion Health Sciences, Inc. dated as of January 30, 2024 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on January 31, 2024)
31.1*		Certification of Principal Executive Officer pursuant to Rule 13a – 14(a) and 15d-14(a), under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*		Certification of Principal Financial and Accounting Officer pursuant to Rule 13a – 14(a) and 15d-14(a), under the Securities and Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**		Certification of Principal Executive Officer and Principal Financial and Accounting Officer pursuant to 18.U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002
101.INS*		Inline XBRL Instance Document
101.SCH*		Inline XBRL Taxonomy Extension Schema Document
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*		Cover Page Interactive Data File - the cover page from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 is formatted in Inline XBRL

 

*	Filed herewith.
**	Furnished herewith.

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

	Guardion Health Sciences, Inc.
	(Registrant)
May 13, 2024	By:	/s/ Jan Hall
		Jan Hall
		Chief Executive Officer
		(Principal Executive Officer)
May 13, 2024	By:	/s/ Katie Cox
		Katie Cox
		Chief Accounting Officer
		(Principal Financial and Accounting Officer)

 

 

Exhibit 31.1

 

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER OF GUARDION HEALTH SCIENCES, INC.

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Jan Hall, certify that:

 

1.	I have reviewed this quarterly report on Form 10-Q of Guardion Health Sciences, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: May 13, 2024	/s/ Jan Hall
	Jan Hall
	Chief Executive Officer (Principal Executive Officer)

 

 

 

Exhibit 31.2

 

CERTIFICATION OF PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER OF GUARDION HEALTH SCIENCES, INC. PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Katie Cox, certify that:

 

1.	I have reviewed this quarterly report on Form 10-Q of Guardion Health Sciences, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: May 13, 2024	/s/ Katie Cox
	Katie Cox
	Chief Accounting Officer
	(Principal Financial and Accounting Officer)

 

 

 

Exhibit 32.1

 

CERTIFICATIONS OF

PRINCIPAL EXECUTIVE OFFICER

AND PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of Guardion Health Sciences, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2024 (the “Report”) as filed with the Securities and Exchange Commission on the date hereof, each of Jan Hall, Chief Executive Officer of the Company, and Katie Cox, Chief Accounting Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as enacted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

	(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
	(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

May 13, 2024	/s/ Jan Hall
	Jan Hall
	Chief Executive Officer
	(Principal Executive Officer)
May 13, 2024	/s/ Katie Cox
	Katie Cox
	Chief Accounting Officer
	(Principal Financial and Accounting Officer)

 

 

v3.24.1.1.u2

Cover - shares	3 Months Ended
	Mar. 31, 2024	May 01, 2024
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2024
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2024
Current Fiscal Year End Date	--12-31
Entity File Number	001-38861
Entity Registrant Name	GUARDION HEALTH SCIENCES, INC.
Entity Central Index Key	0001642375
Entity Tax Identification Number	47-4428421
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	2925 Richmond Avenue
Entity Address, Address Line Two	Suite 1200
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77098
City Area Code	800
Local Phone Number	873-5141
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	GHSI
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		1,284,156

v3.24.1.1.u2

Condensed Consolidated Balance Sheets - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Current assets
Cash and cash equivalents	$ 5,605,035	$ 6,359,646
Accounts receivable, net	2,103,325	2,274,394
Inventories, net	2,134,213	2,677,112
Prepaid expenses and other current assets	539,209	573,780
Total current assets	10,381,782	11,884,932
Property and equipment, net	25,089	33,245
Total assets	10,406,871	11,918,177
Current liabilities
Accounts payable	413,294	614,122
Accrued expenses	857,805	704,912
Total current liabilities	1,271,099	1,319,034
Warrant derivative liability – long-term	5,721,688	2,453,100
Total liabilities	6,992,787	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 issued and outstanding at March 31, 2024 and December 31, 2023, respectively	1,284	1,275
Additional paid-in capital	101,725,811	101,711,035
Accumulated deficit	(98,313,011)	(93,566,267)
Total stockholders’ equity	3,414,084	8,146,043
Total liabilities, preferred stock and stockholders’ equity	$ 10,406,871	$ 11,918,177

v3.24.1.1.u2

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	10,000,000	10,000,000
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	250,000,000	250,000,000
Common stock, shares issued	1,284,156	1,275,238
Common stock, shares outstanding	1,284,156	1,275,238

v3.24.1.1.u2

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Revenue
Total revenue	$ 2,999,645	$ 3,185,689
Cost of goods sold
Total cost of goods sold	1,820,645	1,850,387
Gross Profit	1,179,000	1,335,302
Operating expenses
Research and development	3,168	62,734
Sales and marketing	361,908	598,655
General and administrative	1,834,669	2,050,252
Transaction costs related to pending disposition of business	529,690	87,668
Loss on disposal of fixed assets	3,366
Total operating expenses	2,732,801	2,799,309
Loss from operations	(1,553,801)	(1,464,007)
Other income (expense):
Change in fair value of warrant derivative liability	(3,268,588)	1,898,100
Interest income, net	75,645	98,998
Total other income (expense)	(3,192,943)	1,997,098
Net income (loss)	$ (4,746,744)	$ 533,091
Net income (loss) per common share - basic	$ (3.71)	$ 0.42
Net income (loss) per common share - diluted	$ (3.71)	$ 0.42
Weighted average common shares outstanding - basic	1,280,306	1,267,340
Weighted average common shares outstanding - diluted	1,280,306	1,267,340
Nutritional Supplements [Member]
Revenue
Total revenue	$ 2,918,526	$ 3,091,447
Cost of goods sold
Total cost of goods sold	1,776,479	1,781,827
Ocular Products [Member]
Revenue
Total revenue	81,119	94,242
Cost of goods sold
Total cost of goods sold	$ 44,167	$ 68,560

v3.24.1.1.u2

Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Balance at Dec. 31, 2022	$ 1,267	$ 101,640,955	$ (93,724,300)	$ 7,917,922
Balance, shares at Dec. 31, 2022	1,267,340
Fair value of vested stock options		25,182		25,182
Fair value of vested restricted stock		5,329		5,329
Net income (loss)			533,091	533,091
Balance at Mar. 31, 2023	$ 1,267	101,671,466	(93,191,209)	8,481,524
Balance, shares at Mar. 31, 2023	1,267,340
Balance at Dec. 31, 2023	$ 1,275	101,711,035	(93,566,267)	8,146,043
Balance, shares at Dec. 31, 2023	1,275,238
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	$ 9	(9)
Common stock issued upon exercise of warrants, shares	8,918
Net income (loss)			(4,746,744)	(4,746,744)
Balance at Mar. 31, 2024	$ 1,284	$ 101,725,811	$ (98,313,011)	$ 3,414,084
Balance, shares at Mar. 31, 2024	1,284,156

v3.24.1.1.u2

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Operating Activities
Net income (loss)	$ (4,746,744)	$ 533,091
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	4,790	4,792
Loss on disposal of fixed asset	3,366
Fair value of vested stock options	12,615	25,182
Fair value of vested restricted common stock	2,170	5,329
Change in fair value of warrant derivative liability	3,268,588	(1,898,100)
(Increase) decrease in:
Accounts receivable	171,069	(22,393)
Inventories	542,899	58,501
Prepaid expenses	34,571	97,235
Increase (decrease) in:
Accounts payable	(200,828)	(629,483)
Operating lease liability		(3,807)
Accrued expenses	152,893	(49,557)
Net cash used in operating activities	(754,611)	(1,879,210)
Investing Activities
Purchase of property and equipment		(1,654)
Net cash used in investing activities		(1,654)
Financing Activities
Redemption of preferred stock		(5,250,000)
Net cash used in financing activities		(5,250,000)
Cash and cash equivalents:
Net decrease in cash and cash equivalents	(754,611)	(7,130,864)
Balance at beginning of period	6,359,646	15,905,490
Balance at end of period	5,605,035	8,774,626
Supplemental disclosure of cash flow information:
Income taxes
Interest

v3.24.1.1.u2

Pay vs Performance Disclosure - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Pay vs Performance Disclosure [Table]
Net Income (Loss)	$ (4,746,744)	$ 533,091

v3.24.1.1.u2

Insider Trading Arrangements	3 Months Ended
	Mar. 31, 2024
Trading Arrangements, by Individual [Table]
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

v3.24.1.1.u2

Organization and Business Operations	3 Months Ended
	Mar. 31, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization and Business Operations	1. Organization and Business Operations   Business   Guardion Health Sciences, Inc. (the “Company”) is a clinical nutrition company that develops and distributes clinically supported dietary supplements. The Company offers a portfolio of science-based, clinically supported products designed to support consumers, healthcare professionals and providers, and their patients.   Pending Disposition of Substantially all of the Company’s Business and Operations   On January 30, 2024, the Company, Viactiv Nutritionals, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (“Viactiv”), and Activ Nutritional LLC, a Delaware limited liability corporation, which is wholly-owned by Viactiv (“Activ”), entered into an Equity Purchase Agreement (the “Agreement”) with Doctor’s Best Inc., a Delaware corporation (“Doctor’s Best”). Pursuant to the Agreement, Doctor’s Best agreed to acquire all of the outstanding equity interests of Activ from Viactiv (the “Transaction”) for aggregate cash consideration to the Company of $17,200,000 and subject to the terms and conditions contained in the Agreement.   Activ owns the Company’s Viactiv® brand and business, which accounted for 97.3% and 97.0% of the Company’s total operating revenue for the three months ended March 31, 2024 and 2023, respectively, and 97.2% and 96.3% of the Company’s total operating revenue for the years ended December 31, 2023 and 2022, respectively. See Note 9 for additional information with regard to this Transaction.   Nasdaq Listing and Reverse Stock Split   The Company’s common stock is traded on the Nasdaq Capital Market (“Nasdaq”) under the symbol “GHSI”. On January 6, 2023, the Company effected a 1-for-50 reverse split of its outstanding shares of common stock in order to remain in compliance with the $1.00 minimum closing bid price requirement of Nasdaq. However, there can be no assurances that the Company will be able to remain in compliance with the $1.00 minimum closing bid price requirement of Nasdaq over time, or that it will be successful in maintaining compliance with any of the other continued listing requirements of Nasdaq.   Liquidity   For the three months ended March 31, 2024, the Company incurred a net loss of $(4,746,744), a loss from operations of $(1,553,801), and used cash in operating activities of $(754,611). The Company has a history of operating losses and negative cash flows. Even though the Company’s management identified certain indicators including, among others, the current period loss from operations, the potential impact of inflation and general economic uncertainty, and the continuing costs with respect to the pending sale of its Viactiv brand and business, management concluded these indicators do not raise substantial doubt regarding the Company’s ability to continue as a going concern within one year after the date these financial statements are issued. As of March 31, 2024, the Company had $5,605,035 of cash, and working capital (including cash) of $9,110,684, and management determined that it is probable that the Company will be able to fund its current operating plan and meet all of its obligations due within one year from the date these financial statements are issued.   However, this determination is 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 which involve unknown risks and uncertainties that may individually or materially impact the matters discussed herein for a variety of reasons that are outside the control of the Company. These matters include, but are not limited to, the pending sale of the Viactiv brand and business, including whether the sale is approved by the stockholders of the Company at its upcoming Special Meeting of Stockholders scheduled for May 23, 2024 (the “Special Meeting”), whether the sale is closed on an expeditious basis, and whether the voluntary plan of liquidation and dissolution (the “Plan of Liquidation and Dissolution”) is approved by stockholders at the Special Meeting or any adjournment thereof. Any or all of these factors could adversely impact the Company’s operating cash flows in future periods. On April 8, 2024, the Company filed a Definitive Proxy Statement with the United States Securities and Exchange Commission (the “SEC”) in order to solicit the approval of the Company’s stockholders of record on April 5, 2024 in connection with the Plan of Liquidation and Dissolution.     In the event that the Transaction does not close, the amount and timing of future cash requirements will depend, in part, on the Company’s ability to ultimately achieve operating profitability. The Company expects to continue to incur net losses and negative operating cash flows in the near-term and will continue to incur significant expenses for the development, commercialization and distribution of its clinical nutrition products (including the Viactiv® product line) and the successful development and commercialization of new products and product lines. The Company may also utilize cash to fund acquisitions of complementary businesses, product lines or brands.   In the event that the Transaction does not close, the Company may seek to raise additional debt and/or equity capital to fund future operations, but there can be no assurances that the Company will be able to secure such additional financing in the amounts necessary to fully fund its operating requirements on acceptable terms or at all. If the Company is unable to access sufficient capital resources on a timely basis, the Company may be forced to reduce or discontinue its product development programs or curtail or cease operations.   The continuing impact of the actions by the Federal Reserve to address inflation, most notably increases in interest rates, rising energy prices and increasing labor costs create uncertainty about the future economic environment which will continue to evolve and, we believe, has impacted the Company’s business in 2023 and 2024, and will continue to impact business during the remainder of 2024. The implications of higher government deficits and debt, tighter monetary policy, and potentially higher long-term interest rates may drive a higher operating costs for the business.

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Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2024
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies   Basis of Presentation   The unaudited condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) pursuant to the applicable rules and regulations of the SEC for interim financial information. The unaudited condensed consolidated financial statements have been prepared on the same basis as the Company’s annual financial statements for the year ended December 31, 2023 and, in the opinion of management, reflect all adjustments, which consist of normal recurring adjustments, considered necessary for a fair presentation of the periods presented. The results of operations for the interim periods presented are not necessarily indicative of the results of operations to be expected for the full fiscal year ending December 31, 2024. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as filed with the SEC. The condensed consolidated balance sheet as of December 31, 2023 was derived from the audited consolidated financial statements as of that date, but does not include all disclosures, including notes, required by GAAP.   Principles of Consolidation   The unaudited consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Viactiv Nutritionals, Inc. and NutriGuard Formulations, Inc. All intercompany balances and transactions have been eliminated in consolidation.   Segment Information   The Company operates and reports in one segment, which consists of the development and distribution of clinically supported dietary supplements. The Company’s operating segment is reported in a manner consistent with the internal reporting provided to the Company’s Chief Operating Decision Maker, which is the Company’s President and Chief Executive Officer.     Use of Estimates   The preparation of the Company’s financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities. Actual results could differ from those estimates. On an ongoing basis, management reviews its estimates and if deemed appropriate, those estimates are adjusted. Significant estimates include those related to assumptions used in valuing inventories at net realizable value, assumptions used in valuing stock-based compensation, the valuation allowance for deferred tax assets, accruals for potential liabilities, and assumptions used in the determination of the Company’s liquidity. Actual results could differ materially from those estimates.   Revenue Recognition   Revenue and costs of sales are recognized when control of the products transfers to our customer, which generally occurs upon delivery to the customer. The Company’s performance obligations are satisfied at that time. The Company does not have any significant contracts with customers requiring performance beyond delivery, and contracts with customers contain no incentives or discounts that could cause revenue to be allocated or adjusted over time. Shipping and handling activities are performed before the customer obtains control of the goods and therefore represent a fulfillment activity rather than a promised service to the customer.   All products sold by the Company are distinct individual products and are offered for sale as finished goods only, and there are no performance obligations required post-shipment for customers to derive the expected value from them. Contracts with customers contain no incentives or discounts that could cause revenue to be allocated or adjusted over time.   Historically the Company has not experienced any significant payment delays from customers.   In certain circumstances, returns of products are allowed. Due to the insignificant amount of historical returns, the stand-alone nature of our products, and our assessment of performance obligations and transaction pricing for our sales contracts the Company does not currently maintain a contract asset or liability balance for obligations. The Company assesses its contracts and the reasonableness of our conclusions on a quarterly basis.   At March 31, 2024 and December 31, 2023, the allowance for doubtful accounts was $0 and $1,840, respectively.   Revenue by product:  Schedule of Revenues by Product     2024     2023       Three Months Ended March 31,       2024     2023                 Nutritional supplements   $ 2,918,526     $ 3,091,447   Ocular products     81,119       94,242   Revenue by product   $ 2,999,645     $ 3,185,689     Third-Party Outsourcing   The Company derives substantially all of its revenue from the sale of products using a third-party fulfillment center to provide order processing and sales fulfillment, customer invoicing and collections, and product warehousing. Substantially all of the Company’s products are shipped through the third-party fulfillment center to the customer. Shipping charges to customers are included in revenues. In addition, the Company uses the third-party fulfillment center to provide sales and inventory management, and certain marketing and promotional services.   The Company outsources the production of substantially all of its products with a third party that manufactures and packages the finished products under a product supply agreement.     Costs incurred related to third-party outsourcing, which includes manufacturing, order processing and fulfillment, customer invoicing, collections and warehousing, were approximately $1,509,600 and $1,937,000 for the three months ended March 31, 2024 and 2023, respectively.   Cost of Goods Sold   Cost of goods sold is comprised of the costs for third-party contract manufacturing, packaging, manufacturing fees, and in-bound freight charges.   Shipping Costs   Shipping costs associated with product distribution after manufacture are included as part of cost of goods sold. Shipping and handling expense totaled $102,435 and $146,820 for the three months ended March 31, 2024 and 2023, respectively.   Advertising Costs   Advertising costs are expensed as incurred and are included in sales and marketing expense. Advertising costs were $337,364 and $479,866 for the three months ended March 31, 2024 and 2023, respectively.   Concentrations   Revenue. During the three months ended March 31, 2024, the Company had two customers that accounted for an aggregate of 72% of total revenue. The largest customer accounted for 46% of the Company’s total revenue, the second largest customer accounted for 26% of the Company’s total revenue. During the three months ended March 31, 2023, the Company had three customers that accounted for 80% of the Company’s total revenue. The largest customer accounted for 59% of the Company’s total revenue, the second largest customer accounted for 11% of the Company’s total revenue and the third largest customer accounted for 10% of the Company’s revenue. No other customer accounted for more than 10% of revenue during the three months ended March 31, 2024 and 2023.   Accounts receivable. As of March 31, 2024, the Company had accounts receivable from two customers which comprised approximately 81% of its accounts receivable. The largest customer accounted for 61% of the accounts receivable total and the other customer accounted for 20%. As of December 31, 2023, the Company had accounts receivable from one customer which comprised approximately 57% of its accounts receivable and one customer that accounted for 18% of its accounts receivable. No other customer accounted for more than 10% of accounts receivable as of March 31, 2024 and December 31, 2023.   Purchases from vendors. During the three months ended March 31, 2024 and 2023, the Company utilized one manufacturer for most of its production and packaging of its dietary supplement products. Total purchases from this manufacturer accounted for approximately 40% of all purchases during the three months ended March 31, 2024 and approximately 49% of all purchases during the three months ended March 31, 2023. The Company utilized a firm to manage and handle media and advertising of its dietary supplement products. Total purchases from this vendor accounted for approximately 10% and 13% of all purchases during the three months ended March 31, 2024 and 2023, respectively. No other vendors accounted for more than 10% of purchases during the three months ended March 31, 2024 and 2023.   Accounts payable. As of March 31, 2024, two vendors accounted for 82% of total accounts payable. One vendor accounted for 72% and a second vendor accounted for 10% of the accounts payable at March 31, 2024. As of December 31, 2023, one vendor accounted for 91% of the total accounts payable. No other vendor accounted for more than 10% of accounts payable as of March 31, 2024 and December 31, 2023.   Cash and cash equivalents. Cash and cash equivalents consist of funds deposited with BMO Harris Bank(“BMO”), a major, established, high quality financial institution in short-term (original maturity of generally 60 days or less) liquid investments in money market deposit accounts. Cash equivalents are classified as Level 1 in the GAAP valuation hierarchy and are valued using the net asset value (“NAV”) per share of the money market fund. The Company has an overnight investment feature established with BMO whereby the Company’s cash is swept into a Money Market Mutual Fund managed by Goldman Sachs Asset Management. This fund invests solely in high quality U.S. government issued securities. As of March 31, 2024, $5,605,035 included in cash and cash equivalents was held in the Goldman Sachs Financial Square Government Institutional Fund, a fund that is not insured by the Federal Deposit Insurance Corporation (the “FDIC”).     The Company routinely has cash balances in financial institutions in excess of the FDIC and SIPC insurance limits of $250,000 and $500,000, respectively. The Company believes that no significant concentration of credit risk exists with respect to its cash balances because of its assessment of the creditworthiness and financial viability of the financial institutions that hold such cash balances. The Company has not experienced any losses to date resulting from this policy.   Stock-Based Compensation   Stock-based awards for stock options and restricted stock awards to employees and non-employees are accounted for using the fair value method in accordance with ASC 718, Compensation – Stock Compensation. The estimated fair value of stock options granted to employees in exchange for services is measured at the grant date, using a fair value-based method, such as a Black-Scholes option valuation model, and is recognized as an expense on a straight-line basis over the requisite service periods. The assumptions used in the Black-Scholes option pricing model such as risk-free interest rates, expected volatility, expected life, and future dividends could materially affect compensation expense recorded in future periods. The fair value of restricted stock units is measured at the grant date based on the closing market price of the Company’s common stock on the date of grant and is recognized as an expense on a straight-line basis over the requisite service periods. Recognition of compensation expense for non-employees is accounted for in the same period and manner as if the Company had paid cash for the services.   Income (Loss) per Common Share   Basic income (loss) per share is computed by dividing net loss by the weighted-average common shares outstanding during the period, excluding shares of unvested restricted common stock outstanding. Diluted earnings per share is computed based on the weighted-average common shares outstanding plus the effect of dilutive potential common shares outstanding during the period calculated using the treasury stock method. Shares of vested restricted stock are included in the diluted weighted average number of common shares outstanding from the date they are vested. Dilutive potential common shares include shares from unexercised warrants and options. Potential common share equivalents have been excluded where their inclusion would be anti-dilutive. The Company experienced a net loss for the three months ended March 31, 2024 and net income for the three months ended March 31, 2023. Although the Company reported net income for the three months ended March 31, 2023, using the treasury stock method for the period from January 1, 2023 to the redemption of the preferred stock on February 8, 2023, under the most advantageous pricing approach, there was no material change to the diluted net income per share as reported.   The following potentially dilutive shares were excluded from the shares used to calculate diluted earnings per share:  Schedule of Anti-dilutive Securities Excluded from Computation of Earnings per Share     2024     2023       March 31,       2024     2023                 Warrants     736,438       1,526,701   Options     20,577       12,459   Unvested restricted common stock     333       667   Anti-dilutive securities     757,348       1,539,827     Fair Value of Financial Instruments   Accounting standards require certain assets and liabilities to be reported at fair value in the financial statements and provide a framework for establishing that fair value. Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. When determining fair value, the Company considers the principal or most advantageous market in which it transacts and considers assumptions that market participants would use when pricing the asset or liability. The framework for determining fair value is based on a hierarchy that prioritizes the inputs and valuation techniques used to measure fair value:   Level 1 – Quoted prices in active markets for an identical asset or liability that the Company has the ability to access as of the measurement date.     Level 2 – Inputs, other than quoted prices included within Level 1, which are directly observable for the asset or liability or indirectly observable through corroboration with observable market data.   Level 3 – Unobservable inputs in which there is little or no market data for the asset or liability which requires the reporting entity to develop its own assumptions.   The Company determines the level in the fair value hierarchy within which each fair value measurement falls in its entirety, based on the lowest level input that is significant to the fair value measurement in its entirety. In determining the appropriate levels, the Company performs an analysis of the assets and liabilities at each reporting period end.   The following table sets forth by level, within the fair value hierarchy, the Company’s financial assets at fair value as of March 31, 2024 and December 31, 2023:  Schedule of Assets and Liabilities at Fair Value     Level 1     Level 2     Level 3     Total       March 31, 2024       Level 1     Level 2     Level 3     Total                             Assets   $ -     $ -     $ -     $ -   Total assets   $ -     $ -     $ -     $ -                                     Liabilities                                 Warrant derivative liability   $ -     $ -     $ 5,721,688     $ 5,721,688   Total liabilities   $ -     $ -     $ 5,721,688     $ 5,721,688         Level 1     Level 2     Level 3     Total       December 31, 2023       Level 1     Level 2     Level 3     Total                             Assets   $ -     $ -     $ -     $ -   Total assets   $ -     $ -     $ -     $ -                                     Liabilities                                 Warrant derivative liability   $ -     $ -     $ 2,453,100     $ 2,453,100   Total liabilities   $ -     $ -     $ 2,453,100     $ 2,453,100     The following table provides a roll-forward of the warrant derivative liability measured at fair value on a recurring basis using unobservable level 3 inputs for the three months ended March 31, 2024 as follows:  Schedule of Warrant Derivative Liability Measured at Fair Value     March 31, 2024           Balance as of beginning of period – December 31, 2023   $ 2,453,100   Change in fair value of warrant derivative liability     3,268,588   Balance as of end of period – March 31, 2024   $ 5,721,688     As of March 31, 2024 and December 31, 2023, the Company’s outstanding warrants were treated as derivative liabilities and changes in the fair value were recognized in the statement of operations (see Note 5).     The Company believes the carrying amounts of certain financial instruments, including cash, accounts receivable, and accounts payable and accrued liabilities, approximate fair value due to the short-term nature of such instruments and are excluded from the fair value tables above.   Recent Accounting Pronouncements   In November 2023, the Financial Accounting Standards board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure (“ASU 2023-07”), which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expense categories that are regularly provided to the chief operating decision maker and included in each reported measure of a segment’s profit or loss. ASU-2023-07 also requires all annual disclosures about a reportable segment’s profit or loss and assets to be provided in interim periods and for entities with a single reportable segment to provide all the disclosures required by ASC 280, Segment Reporting, including the significant segment expense disclosures. The Company adopted ASU 2023-07 effective January 1, 2024, and there was no material impact on the Company’s financial position, results of operations and cash flows.   Other recent accounting pronouncements and guidance issued by FASB, its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

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Inventories	3 Months Ended
	Mar. 31, 2024
Inventory Disclosure [Abstract]
Inventories	3. Inventories   Inventories are stated at the lower of cost (first-in, first-out) or net realizable value and consisted of the following:  Schedule of Inventories     March 31,     December 31,       2024     2023                 Raw materials   $ 35,405     $ 35,404   Finished products     2,098,808       2,641,708   Inventories, net   $ 2,134,213     $ 2,677,112

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Operating Leases	3 Months Ended
	Mar. 31, 2024
Operating Leases
Operating Leases	4. Operating Leases   The Company leases its corporate office space located in Houston, Texas, with lease payments of approximately $3,000 per month under a month-to-month lease. Leases with the duration of less than 12 months are not recognized on the balance sheet and are expensed on a straight-line basis over the lease term.

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Warrant Derivative Liability	3 Months Ended
	Mar. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Warrant Derivative Liability	5. Warrant Derivative Liability   At March 31, 2024 and December 31, 2023, the Company had 690,100 and 740,000 Series A warrants outstanding, respectively, exercisable at $7.57 per share (the “Series A Warrants”), which expire in February 2027. The Series A Warrants contain certain anti-dilution provisions, including a down round provision and certain cash redemption rights.   In addition, the Series A Warrants contain a provision which requires that the exercise price of such warrants be adjusted to the volume weighted average price of the Company’s common stock for the five trading days immediately following effectiveness of a reverse stock split if such calculation resulted in an exercise price below the then-current exercise price. The Company determined that this provision represented a variable that is not an input to the fair value of a “fixed-for-fixed” option as defined under ASC 815-40, and thus the Series A Warrants are not considered indexed to the Company’s own stock and not eligible for an exception from derivative accounting. Accordingly, the Series A warrants are classified as a derivative liability. In January 2023, in conjunction with the effectiveness of the Company’s reverse stock split, the exercise price of the Series A warrants was adjusted downward to $7.57 per share.     The fair value of the warrant liability at March 31, 2024 and at December 31, 2023 was $5,721,688 and $2,453,100, respectively. The estimated fair value of the warrants is determined using Level 3 inputs. Inherent in a binomial lattice model are assumptions related to expected probability of event occurrence, including stock splits, stock-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its common stock warrants based on the Company’s historical volatility. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant or valuation date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the Company’s historical rate, which the Company anticipates remaining at zero. The derivative liabilities were valued using a binomial lattice model with the following assumptions:  Schedule of Warrant Derivative Liability     Series A Warrants       March 31, 2024     December 31, 2023                 Common stock market price   $ 9.09     $ 5.34   Exercise price     7.57       7.57   Expected term (in years)     2.9       3.15   Expected volatility     191.60 %     97.60 % Expected dividend yield     -       -   Risk-free interest rate     4.40 %     4.10 % Total fair value   $ 5,721,688     $ 2,453,100

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Redeemable Preferred Stock (Temporary Equity, redeemed in full in February 2023)	3 Months Ended
	Mar. 31, 2024
Equity [Abstract]
Redeemable Preferred Stock (Temporary Equity, redeemed in full in February 2023)	6. Redeemable Preferred Stock (Temporary Equity, redeemed in full in February 2023)   On November 29, 2022, the Company issued and sold, in a private placement, 495,000 shares of the Company’s Series C Convertible Redeemable Preferred Stock (the “Series C Preferred Stock”), and 5,000 shares of the Company’s Series D Redeemable Preferred Stock (the “Series D Preferred Stock,” and together with the Series C Preferred Stock, the “Preferred Stock”). During the three months ended March 31, 2023, the Preferred Stock was redeemed in full for $5,250,000 cash, consisting of $4,750,000 in gross proceeds from the issuance of the Preferred Stock, plus an additional $500,000 to fund a 105% redemption price. There were no conversions of the Preferred Stock into common stock.

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Stockholders’ Equity	3 Months Ended
	Mar. 31, 2024
Equity [Abstract]
Stockholders’ Equity	7. Stockholders’ Equity   Common Stock   The Company is authorized to issue 250,000,000 shares of common stock, par value $0.001 per share. As of March 31, 2024 and December 31, 2023, there were 1,284,156 shares and 1,275,238 shares of common stock issued and outstanding.   Warrants   A summary of the Company’s warrant activity is as follows:   Schedule of Warrants Activity     Shares     Weighted Average Exercise Price     Weighted Average Remaining Contractual Term (Years)                       December 31, 2023     786,701     $ 8.96       3.12   Granted     -       -       -   Forfeitures     -       -       -   Expirations     (363 )     -       -   Exercised     (49,900 )     -       -   March 31, 2024, all exercisable     736,438     $ 9.00       2.87       The exercise prices of warrants outstanding and exercisable as of March 31, 2024 are as follows:   Schedule of Exercise Price of Warrants Outstanding and Exercisable Warrants Outstanding and Exercisable (Shares)     Exercise Prices               727,100     $ 7.57     9,338     $ 120.00     736,438             During the three months ended March 31, 2024, 49,900 Series A Warrants were exercised on a cashless basis, resulting in the issuance of 8,918 shares of common stock. Based on the closing price of the Company’s common stock on March 31, 2024 of $9.02 per share, the aggregate intrinsic value of warrants outstanding as of March 31, 2024 was $1,054,295.   Stock Options   A summary of the Company’s stock option activity is as follows:   Schedule of Share-based Compensation, Stock Options, Activity     Shares     Weighted Average Exercise Price     Weighted Average Remaining Contractual Term (Years)                       December 31, 2023     20,577     $ 77.72       7.60   Granted     -       -       -   Forfeitures     -       -       -   Expirations     -       -       -   Exercised     -       -       -   March 31, 2024, outstanding     20,577     $ 77.72       7.39   March 31, 2024, exercisable     13,153     $ 116.19       6.76     The exercise prices of options outstanding and exercisable as of March 31, 2024 are as follows:   Schedule of Exercise Price of Options Outstanding and Exercisable Options Outstanding (Shares)     Options Exercisable (Shares)     Exercise Prices                     10,000       3,750     $ 6.01     1,344       1,344       7.35     1,344       504       7.78     841       841       45.50     1,002       668       80.50     1,008       1,008       88.00     840       840       116.70     336       336       162.33     3,862       3,862       300.00     20,577       13,153             The Company accounts for share-based payments in accordance with ASC 718, Compensation – Stock Compensation, wherein grants are measured at the grant date fair value and charged to operations ratably over the vesting periods.     During the three months ended March 31, 2024 and 2023, there were no grants of options to purchase shares of common stock.   The Company computes stock price volatility over expected terms based on its historical common stock trading prices. The risk-free interest rate was based on rates established by the Federal Reserve Bank. The expected dividend yield was based on the fact that the Company has not paid dividends to its common stockholders in the past and does not expect to pay dividends to its common stockholders in the future. The expected life of the stock options granted is estimated using the “simplified” method, whereby the expected term equals the average of the vesting term and the original contractual term of the stock option.   For the three months ended March 31, 2024 and 2023, the Company recognized aggregate share-based compensation expense of $12,615 and $25,182, respectively, related to the fair value of vested options.   As of March 31, 2024, the Company had an aggregate of 7,424 remaining unvested options outstanding, with a remaining fair value of approximately $123,000 to be amortized over an average of 4.5 years. Based on the closing price of the Company’s common stock on March 31, 2024 of $9.02 per share, the aggregate intrinsic value of options outstanding as of March 31, 2024 was $34,138.   Restricted Common Stock   During the three months ended March 31, 2024 and 2023, there were no grants of restricted common stock.   During the three months ended March 31, 2024 and 2023, the Company recognized share-based compensation expense of $2,170 and $5,329, respectively, related to vested restricted shares. At March 31, 2024, there was $2,170 of unvested compensation related to the non-vested shares that will be amortized over a remaining vesting period of 0.25 years.   The following table summarizes restricted common stock activity for the three months ended March 31, 2024:   Schedule of Non Vested Restricted Common Stock Activity     Number of shares     Fair value of shares                 Non-vested shares, December 31, 2022     333     $ 80.50   Granted     -       -   Vested     -       -   Forfeited     -       -   Non-vested shares, March 31, 2023     333     $ 80.50

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Income Taxes	3 Months Ended
	Mar. 31, 2024
Income Tax Disclosure [Abstract]
Income Taxes	8. Income Taxes   During the three months ended March 31, 2024 and 2023, the Company did not record any provision for income taxes, as the Company incurred losses during such periods. Deferred tax assets and liabilities reflect the net tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company has recorded a full valuation allowance against its deferred tax assets for all periods presented as the Company currently believes it is more likely than not that the deferred tax assets will not be realized.

v3.24.1.1.u2

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2024
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	9. Commitments and Contingencies   Legal Proceedings   The Company is periodically the subject of various pending or threatened legal actions and claims arising out of its operations in the normal course of business. In the opinion of the management of the Company, adequate provision has been made in the Company’s financial statements at March 31, 2024 and December 31, 2023 with respect to any such matters.     The Company is not currently a party to any material legal proceedings and is not aware of any pending or threatened legal proceeding against the Company that the Company believes could have a material adverse effect on its business, operating results, cash flows or financial condition.   Pending Disposition of Substantially all of the Company’s Business and Operations   On January 30, 2024, the Company, Viactiv Nutritionals, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (“Viactiv”), and Activ Nutritional LLC, a Delaware limited liability corporation, which is wholly-owned by Viactiv (“Activ”), entered into an Equity Purchase Agreement (the “Agreement”) with Doctor’s Best Inc., a Delaware corporation (“Doctor’s Best”). Pursuant to the Agreement, Doctor’s Best agreed to acquire all of the outstanding equity interests of Activ from Viactiv (the “Transaction”) for aggregate cash consideration to the Company of $17,200,000 (the “Base Purchase Price”), with $1,700,000 of the Base Purchase Price being placed in a third-party escrow account pursuant to the terms of the Agreement, and the Base Purchase Price being subject to adjustment as provided in the Agreement based upon the working capital of Activ at the time of closing (the “Closing”). Doctor’s Best is a wholly-owned subsidiary of Kingdomway USA Corp., the U.S. subsidiary holding company of Xiamen Kingdomway Group Company, which is listed on the Shenzhen Stock Exchange.   The Agreement contains customary representations, warranties and covenants regarding the parties thereto. The Closing is subject to the satisfaction or waiver of certain customary closing conditions, including, but not limited to, the approval of the transaction by the requisite vote of the Company’s stockholders. The Agreement also contains customary termination provisions and mutual indemnification obligations.   The Series A Warrant agreement (see Note 5) contains a cash settlement provision whereby the holders of the warrants can elect to settle the warrants for cash based on the Black-Scholes value of the warrant, as defined, upon the occurrence of certain fundamental transactions, as defined, such as a change of control, or the sale or disposition of all or substantially all of the Company’s assets. Management believes that the pending disposition described above, if consummated, would meet the definition of a fundamental transaction and would result in the Company being required to purchase the Series A Warrants from the holders by cash payment equal to the Black-Scholes value of the Series A warrants.   Management currently estimates that the liability to the Company associated with these warrants based on information currently available to the Company is approximately $5,700,000. That amount could increase or decrease based on a number of factors that are outside the control of the Company. Such factors include, among others, the trading and price volatility of the Company’s common stock, the number of warrant holders that may elect to exercise their warrants in accordance with their terms prior to the closing of the Transaction and forego their put rights, and the number of warrant holders that exercise their put rights in accordance with the terms of the warrants. To the extent that this obligation is triggered and exercised by the warrant holders, the Company would need to make such payments out of its available cash and/or the Transaction proceeds, and any such payments will reduce the amount each Company stockholder would be able to receive from any liquidating distributions.   In the event that the Company’s stockholders approve the transaction at its upcoming Special Meeting of Stockholders scheduled for May 23, 2024 (the “Special Meeting”), and the transaction closes, the Company would be left with minimal operations. The Board of Directors has determined that it is advisable and in the best interests of the Company and the its stockholders to approve a voluntary dissolution and liquidation of the Company pursuant to a Plan of Liquidation and Dissolution, which, if approved, would authorize the Company to liquidate and dissolve in accordance with its terms, but such decision would be subject to the Company’s ability to abandon or delay the Plan of Dissolution in the event that the Board of Directors determines that another transaction would be in the best interests of the Company’s stockholders. Assuming the approval of the Plan of Liquidation and Dissolution by the Company’s stockholders at the Special Meeting, the decision of whether or not to proceed with the dissolution and when to file the Certificate of Dissolution will be made by the Board of Directors in its sole discretion.

v3.24.1.1.u2

Subsequent Events	3 Months Ended
	Mar. 31, 2024
Subsequent Events [Abstract]
Subsequent Events	10. Subsequent Events   The Company performed an evaluation of subsequent events through the date of filing of these condensed consolidated financial statements with the SEC. Other than disclosed below, there were no material subsequent events which affected, or could affect, the amounts or disclosures in the condensed consolidated financial statements.   On April 8, 2024, the Company filed a Definitive Proxy Statement with the SEC in order to solicit the approval of the Company’s stockholders of record on April 5, 2024 in connection with the Transaction and the Plan of Liquidation and Dissolution.

v3.24.1.1.u2

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2024
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation   The unaudited condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) pursuant to the applicable rules and regulations of the SEC for interim financial information. The unaudited condensed consolidated financial statements have been prepared on the same basis as the Company’s annual financial statements for the year ended December 31, 2023 and, in the opinion of management, reflect all adjustments, which consist of normal recurring adjustments, considered necessary for a fair presentation of the periods presented. The results of operations for the interim periods presented are not necessarily indicative of the results of operations to be expected for the full fiscal year ending December 31, 2024. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as filed with the SEC. The condensed consolidated balance sheet as of December 31, 2023 was derived from the audited consolidated financial statements as of that date, but does not include all disclosures, including notes, required by GAAP.
Principles of Consolidation	Principles of Consolidation   The unaudited consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Viactiv Nutritionals, Inc. and NutriGuard Formulations, Inc. All intercompany balances and transactions have been eliminated in consolidation.
Segment Information	Segment Information   The Company operates and reports in one segment, which consists of the development and distribution of clinically supported dietary supplements. The Company’s operating segment is reported in a manner consistent with the internal reporting provided to the Company’s Chief Operating Decision Maker, which is the Company’s President and Chief Executive Officer.
Use of Estimates	Use of Estimates   The preparation of the Company’s financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities. Actual results could differ from those estimates. On an ongoing basis, management reviews its estimates and if deemed appropriate, those estimates are adjusted. Significant estimates include those related to assumptions used in valuing inventories at net realizable value, assumptions used in valuing stock-based compensation, the valuation allowance for deferred tax assets, accruals for potential liabilities, and assumptions used in the determination of the Company’s liquidity. Actual results could differ materially from those estimates.
Revenue Recognition	Revenue Recognition   Revenue and costs of sales are recognized when control of the products transfers to our customer, which generally occurs upon delivery to the customer. The Company’s performance obligations are satisfied at that time. The Company does not have any significant contracts with customers requiring performance beyond delivery, and contracts with customers contain no incentives or discounts that could cause revenue to be allocated or adjusted over time. Shipping and handling activities are performed before the customer obtains control of the goods and therefore represent a fulfillment activity rather than a promised service to the customer.   All products sold by the Company are distinct individual products and are offered for sale as finished goods only, and there are no performance obligations required post-shipment for customers to derive the expected value from them. Contracts with customers contain no incentives or discounts that could cause revenue to be allocated or adjusted over time.   Historically the Company has not experienced any significant payment delays from customers.   In certain circumstances, returns of products are allowed. Due to the insignificant amount of historical returns, the stand-alone nature of our products, and our assessment of performance obligations and transaction pricing for our sales contracts the Company does not currently maintain a contract asset or liability balance for obligations. The Company assesses its contracts and the reasonableness of our conclusions on a quarterly basis.   At March 31, 2024 and December 31, 2023, the allowance for doubtful accounts was $0 and $1,840, respectively.   Revenue by product:  Schedule of Revenues by Product     2024     2023       Three Months Ended March 31,       2024     2023                 Nutritional supplements   $ 2,918,526     $ 3,091,447   Ocular products     81,119       94,242   Revenue by product   $ 2,999,645     $ 3,185,689     Third-Party Outsourcing   The Company derives substantially all of its revenue from the sale of products using a third-party fulfillment center to provide order processing and sales fulfillment, customer invoicing and collections, and product warehousing. Substantially all of the Company’s products are shipped through the third-party fulfillment center to the customer. Shipping charges to customers are included in revenues. In addition, the Company uses the third-party fulfillment center to provide sales and inventory management, and certain marketing and promotional services.   The Company outsources the production of substantially all of its products with a third party that manufactures and packages the finished products under a product supply agreement.     Costs incurred related to third-party outsourcing, which includes manufacturing, order processing and fulfillment, customer invoicing, collections and warehousing, were approximately $1,509,600 and $1,937,000 for the three months ended March 31, 2024 and 2023, respectively.
Cost of Goods Sold	Cost of Goods Sold   Cost of goods sold is comprised of the costs for third-party contract manufacturing, packaging, manufacturing fees, and in-bound freight charges.
Shipping Costs	Shipping Costs   Shipping costs associated with product distribution after manufacture are included as part of cost of goods sold. Shipping and handling expense totaled $102,435 and $146,820 for the three months ended March 31, 2024 and 2023, respectively.
Advertising Costs	Advertising Costs   Advertising costs are expensed as incurred and are included in sales and marketing expense. Advertising costs were $337,364 and $479,866 for the three months ended March 31, 2024 and 2023, respectively.
Concentrations	Concentrations   Revenue. During the three months ended March 31, 2024, the Company had two customers that accounted for an aggregate of 72% of total revenue. The largest customer accounted for 46% of the Company’s total revenue, the second largest customer accounted for 26% of the Company’s total revenue. During the three months ended March 31, 2023, the Company had three customers that accounted for 80% of the Company’s total revenue. The largest customer accounted for 59% of the Company’s total revenue, the second largest customer accounted for 11% of the Company’s total revenue and the third largest customer accounted for 10% of the Company’s revenue. No other customer accounted for more than 10% of revenue during the three months ended March 31, 2024 and 2023.   Accounts receivable. As of March 31, 2024, the Company had accounts receivable from two customers which comprised approximately 81% of its accounts receivable. The largest customer accounted for 61% of the accounts receivable total and the other customer accounted for 20%. As of December 31, 2023, the Company had accounts receivable from one customer which comprised approximately 57% of its accounts receivable and one customer that accounted for 18% of its accounts receivable. No other customer accounted for more than 10% of accounts receivable as of March 31, 2024 and December 31, 2023.   Purchases from vendors. During the three months ended March 31, 2024 and 2023, the Company utilized one manufacturer for most of its production and packaging of its dietary supplement products. Total purchases from this manufacturer accounted for approximately 40% of all purchases during the three months ended March 31, 2024 and approximately 49% of all purchases during the three months ended March 31, 2023. The Company utilized a firm to manage and handle media and advertising of its dietary supplement products. Total purchases from this vendor accounted for approximately 10% and 13% of all purchases during the three months ended March 31, 2024 and 2023, respectively. No other vendors accounted for more than 10% of purchases during the three months ended March 31, 2024 and 2023.   Accounts payable. As of March 31, 2024, two vendors accounted for 82% of total accounts payable. One vendor accounted for 72% and a second vendor accounted for 10% of the accounts payable at March 31, 2024. As of December 31, 2023, one vendor accounted for 91% of the total accounts payable. No other vendor accounted for more than 10% of accounts payable as of March 31, 2024 and December 31, 2023.   Cash and cash equivalents. Cash and cash equivalents consist of funds deposited with BMO Harris Bank(“BMO”), a major, established, high quality financial institution in short-term (original maturity of generally 60 days or less) liquid investments in money market deposit accounts. Cash equivalents are classified as Level 1 in the GAAP valuation hierarchy and are valued using the net asset value (“NAV”) per share of the money market fund. The Company has an overnight investment feature established with BMO whereby the Company’s cash is swept into a Money Market Mutual Fund managed by Goldman Sachs Asset Management. This fund invests solely in high quality U.S. government issued securities. As of March 31, 2024, $5,605,035 included in cash and cash equivalents was held in the Goldman Sachs Financial Square Government Institutional Fund, a fund that is not insured by the Federal Deposit Insurance Corporation (the “FDIC”).     The Company routinely has cash balances in financial institutions in excess of the FDIC and SIPC insurance limits of $250,000 and $500,000, respectively. The Company believes that no significant concentration of credit risk exists with respect to its cash balances because of its assessment of the creditworthiness and financial viability of the financial institutions that hold such cash balances. The Company has not experienced any losses to date resulting from this policy.
Stock-Based Compensation	Stock-Based Compensation   Stock-based awards for stock options and restricted stock awards to employees and non-employees are accounted for using the fair value method in accordance with ASC 718, Compensation – Stock Compensation. The estimated fair value of stock options granted to employees in exchange for services is measured at the grant date, using a fair value-based method, such as a Black-Scholes option valuation model, and is recognized as an expense on a straight-line basis over the requisite service periods. The assumptions used in the Black-Scholes option pricing model such as risk-free interest rates, expected volatility, expected life, and future dividends could materially affect compensation expense recorded in future periods. The fair value of restricted stock units is measured at the grant date based on the closing market price of the Company’s common stock on the date of grant and is recognized as an expense on a straight-line basis over the requisite service periods. Recognition of compensation expense for non-employees is accounted for in the same period and manner as if the Company had paid cash for the services.
Income (Loss) per Common Share	Income (Loss) per Common Share   Basic income (loss) per share is computed by dividing net loss by the weighted-average common shares outstanding during the period, excluding shares of unvested restricted common stock outstanding. Diluted earnings per share is computed based on the weighted-average common shares outstanding plus the effect of dilutive potential common shares outstanding during the period calculated using the treasury stock method. Shares of vested restricted stock are included in the diluted weighted average number of common shares outstanding from the date they are vested. Dilutive potential common shares include shares from unexercised warrants and options. Potential common share equivalents have been excluded where their inclusion would be anti-dilutive. The Company experienced a net loss for the three months ended March 31, 2024 and net income for the three months ended March 31, 2023. Although the Company reported net income for the three months ended March 31, 2023, using the treasury stock method for the period from January 1, 2023 to the redemption of the preferred stock on February 8, 2023, under the most advantageous pricing approach, there was no material change to the diluted net income per share as reported.   The following potentially dilutive shares were excluded from the shares used to calculate diluted earnings per share:  Schedule of Anti-dilutive Securities Excluded from Computation of Earnings per Share     2024     2023       March 31,       2024     2023                 Warrants     736,438       1,526,701   Options     20,577       12,459   Unvested restricted common stock     333       667   Anti-dilutive securities     757,348       1,539,827
Fair Value of Financial Instruments	Fair Value of Financial Instruments   Accounting standards require certain assets and liabilities to be reported at fair value in the financial statements and provide a framework for establishing that fair value. Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. When determining fair value, the Company considers the principal or most advantageous market in which it transacts and considers assumptions that market participants would use when pricing the asset or liability. The framework for determining fair value is based on a hierarchy that prioritizes the inputs and valuation techniques used to measure fair value:   Level 1 – Quoted prices in active markets for an identical asset or liability that the Company has the ability to access as of the measurement date.     Level 2 – Inputs, other than quoted prices included within Level 1, which are directly observable for the asset or liability or indirectly observable through corroboration with observable market data.   Level 3 – Unobservable inputs in which there is little or no market data for the asset or liability which requires the reporting entity to develop its own assumptions.   The Company determines the level in the fair value hierarchy within which each fair value measurement falls in its entirety, based on the lowest level input that is significant to the fair value measurement in its entirety. In determining the appropriate levels, the Company performs an analysis of the assets and liabilities at each reporting period end.   The following table sets forth by level, within the fair value hierarchy, the Company’s financial assets at fair value as of March 31, 2024 and December 31, 2023:  Schedule of Assets and Liabilities at Fair Value     Level 1     Level 2     Level 3     Total       March 31, 2024       Level 1     Level 2     Level 3     Total                             Assets   $ -     $ -     $ -     $ -   Total assets   $ -     $ -     $ -     $ -                                     Liabilities                                 Warrant derivative liability   $ -     $ -     $ 5,721,688     $ 5,721,688   Total liabilities   $ -     $ -     $ 5,721,688     $ 5,721,688         Level 1     Level 2     Level 3     Total       December 31, 2023       Level 1     Level 2     Level 3     Total                             Assets   $ -     $ -     $ -     $ -   Total assets   $ -     $ -     $ -     $ -                                     Liabilities                                 Warrant derivative liability   $ -     $ -     $ 2,453,100     $ 2,453,100   Total liabilities   $ -     $ -     $ 2,453,100     $ 2,453,100     The following table provides a roll-forward of the warrant derivative liability measured at fair value on a recurring basis using unobservable level 3 inputs for the three months ended March 31, 2024 as follows:  Schedule of Warrant Derivative Liability Measured at Fair Value     March 31, 2024           Balance as of beginning of period – December 31, 2023   $ 2,453,100   Change in fair value of warrant derivative liability     3,268,588   Balance as of end of period – March 31, 2024   $ 5,721,688     As of March 31, 2024 and December 31, 2023, the Company’s outstanding warrants were treated as derivative liabilities and changes in the fair value were recognized in the statement of operations (see Note 5).     The Company believes the carrying amounts of certain financial instruments, including cash, accounts receivable, and accounts payable and accrued liabilities, approximate fair value due to the short-term nature of such instruments and are excluded from the fair value tables above.
Recent Accounting Pronouncements	Recent Accounting Pronouncements   In November 2023, the Financial Accounting Standards board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure (“ASU 2023-07”), which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expense categories that are regularly provided to the chief operating decision maker and included in each reported measure of a segment’s profit or loss. ASU-2023-07 also requires all annual disclosures about a reportable segment’s profit or loss and assets to be provided in interim periods and for entities with a single reportable segment to provide all the disclosures required by ASC 280, Segment Reporting, including the significant segment expense disclosures. The Company adopted ASU 2023-07 effective January 1, 2024, and there was no material impact on the Company’s financial position, results of operations and cash flows.   Other recent accounting pronouncements and guidance issued by FASB, its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

v3.24.1.1.u2

Summary of Significant Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2024
Accounting Policies [Abstract]
Schedule of Revenues by Product	Revenue by product:  Schedule of Revenues by Product     2024     2023       Three Months Ended March 31,       2024     2023                 Nutritional supplements   $ 2,918,526     $ 3,091,447   Ocular products     81,119       94,242   Revenue by product   $ 2,999,645     $ 3,185,689
Schedule of Anti-dilutive Securities Excluded from Computation of Earnings per Share	The following potentially dilutive shares were excluded from the shares used to calculate diluted earnings per share:  Schedule of Anti-dilutive Securities Excluded from Computation of Earnings per Share     2024     2023       March 31,       2024     2023                 Warrants     736,438       1,526,701   Options     20,577       12,459   Unvested restricted common stock     333       667   Anti-dilutive securities     757,348       1,539,827
Schedule of Assets and Liabilities at Fair Value	The following table sets forth by level, within the fair value hierarchy, the Company’s financial assets at fair value as of March 31, 2024 and December 31, 2023:  Schedule of Assets and Liabilities at Fair Value     Level 1     Level 2     Level 3     Total       March 31, 2024       Level 1     Level 2     Level 3     Total                             Assets   $ -     $ -     $ -     $ -   Total assets   $ -     $ -     $ -     $ -                                     Liabilities                                 Warrant derivative liability   $ -     $ -     $ 5,721,688     $ 5,721,688   Total liabilities   $ -     $ -     $ 5,721,688     $ 5,721,688         Level 1     Level 2     Level 3     Total       December 31, 2023       Level 1     Level 2     Level 3     Total                             Assets   $ -     $ -     $ -     $ -   Total assets   $ -     $ -     $ -     $ -                                     Liabilities                                 Warrant derivative liability   $ -     $ -     $ 2,453,100     $ 2,453,100   Total liabilities   $ -     $ -     $ 2,453,100     $ 2,453,100
Schedule of Warrant Derivative Liability Measured at Fair Value	The following table provides a roll-forward of the warrant derivative liability measured at fair value on a recurring basis using unobservable level 3 inputs for the three months ended March 31, 2024 as follows:  Schedule of Warrant Derivative Liability Measured at Fair Value     March 31, 2024           Balance as of beginning of period – December 31, 2023   $ 2,453,100   Change in fair value of warrant derivative liability     3,268,588   Balance as of end of period – March 31, 2024   $ 5,721,688

v3.24.1.1.u2

Inventories (Tables)	3 Months Ended
	Mar. 31, 2024
Inventory Disclosure [Abstract]
Schedule of Inventories	Inventories are stated at the lower of cost (first-in, first-out) or net realizable value and consisted of the following:  Schedule of Inventories     March 31,     December 31,       2024     2023                 Raw materials   $ 35,405     $ 35,404   Finished products     2,098,808       2,641,708   Inventories, net   $ 2,134,213     $ 2,677,112

v3.24.1.1.u2

Warrant Derivative Liability (Tables)	3 Months Ended
	Mar. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Schedule of Warrant Derivative Liability	Schedule of Warrant Derivative Liability     Series A Warrants       March 31, 2024     December 31, 2023                 Common stock market price   $ 9.09     $ 5.34   Exercise price     7.57       7.57   Expected term (in years)     2.9       3.15   Expected volatility     191.60 %     97.60 % Expected dividend yield     -       -   Risk-free interest rate     4.40 %     4.10 % Total fair value   $ 5,721,688     $ 2,453,100

v3.24.1.1.u2

Stockholders’ Equity (Tables)	3 Months Ended
	Mar. 31, 2024
Equity [Abstract]
Schedule of Warrants Activity	A summary of the Company’s warrant activity is as follows:   Schedule of Warrants Activity     Shares     Weighted Average Exercise Price     Weighted Average Remaining Contractual Term (Years)                       December 31, 2023     786,701     $ 8.96       3.12   Granted     -       -       -   Forfeitures     -       -       -   Expirations     (363 )     -       -   Exercised     (49,900 )     -       -   March 31, 2024, all exercisable     736,438     $ 9.00       2.87
Schedule of Exercise Price of Warrants Outstanding and Exercisable	The exercise prices of warrants outstanding and exercisable as of March 31, 2024 are as follows:   Schedule of Exercise Price of Warrants Outstanding and Exercisable Warrants Outstanding and Exercisable (Shares)     Exercise Prices               727,100     $ 7.57     9,338     $ 120.00     736,438
Schedule of Share-based Compensation, Stock Options, Activity	A summary of the Company’s stock option activity is as follows:   Schedule of Share-based Compensation, Stock Options, Activity     Shares     Weighted Average Exercise Price     Weighted Average Remaining Contractual Term (Years)                       December 31, 2023     20,577     $ 77.72       7.60   Granted     -       -       -   Forfeitures     -       -       -   Expirations     -       -       -   Exercised     -       -       -   March 31, 2024, outstanding     20,577     $ 77.72       7.39   March 31, 2024, exercisable     13,153     $ 116.19       6.76
Schedule of Exercise Price of Options Outstanding and Exercisable	The exercise prices of options outstanding and exercisable as of March 31, 2024 are as follows:   Schedule of Exercise Price of Options Outstanding and Exercisable Options Outstanding (Shares)     Options Exercisable (Shares)     Exercise Prices                     10,000       3,750     $ 6.01     1,344       1,344       7.35     1,344       504       7.78     841       841       45.50     1,002       668       80.50     1,008       1,008       88.00     840       840       116.70     336       336       162.33     3,862       3,862       300.00     20,577       13,153
Schedule of Non Vested Restricted Common Stock Activity	The following table summarizes restricted common stock activity for the three months ended March 31, 2024:   Schedule of Non Vested Restricted Common Stock Activity     Number of shares     Fair value of shares                 Non-vested shares, December 31, 2022     333     $ 80.50   Granted     -       -   Vested     -       -   Forfeited     -       -   Non-vested shares, March 31, 2023     333     $ 80.50

v3.24.1.1.u2

Organization and Business Operations (Details Narrative) - USD ($)			3 Months Ended		12 Months Ended
	Jan. 30, 2024	Jan. 06, 2023	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	Dec. 31, 2022
Product Information [Line Items]
Proceeds from Divestiture of Businesses	$ 17,200,000
Reverse stock split		1-for-50
Minimum closing bid price		$ 1.00
Net income loss			$ 4,746,744	$ (533,091)
Loss from operations			1,553,801	1,464,007
Net cash used in operating activities			754,611	$ 1,879,210
Cash			5,605,035
Working capital			$ 9,110,684
Accounts Payable [Member] | Customer Concentration Risk [Member] | Viactive Brand [Member]
Product Information [Line Items]
Concentration risk percentage			97.30%	97.00%	97.20%	96.30%

v3.24.1.1.u2

Schedule of Revenues by Product (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Product Information [Line Items]
Revenue by product	$ 2,999,645	$ 3,185,689
Nutritional Supplements [Member]
Product Information [Line Items]
Revenue by product	2,918,526	3,091,447
Ocular Products [Member]
Product Information [Line Items]
Revenue by product	$ 81,119	$ 94,242

v3.24.1.1.u2

Schedule of Anti-dilutive Securities Excluded from Computation of Earnings per Share (Details) - shares	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities	757,348	1,539,827
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities	736,438	1,526,701
Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities	20,577	12,459
Unvested Restricted Common Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities	333	667

v3.24.1.1.u2

Schedule of Assets and Liabilities at Fair Value (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Platform Operator, Crypto Asset [Line Items]
Total assets
Total liabilities	5,721,688	2,453,100
Warrant Derivative Liability [Member]
Platform Operator, Crypto Asset [Line Items]
Total liabilities	5,721,688	2,453,100
Fair Value, Inputs, Level 1 [Member]
Platform Operator, Crypto Asset [Line Items]
Total assets
Total liabilities
Fair Value, Inputs, Level 1 [Member] | Warrant Derivative Liability [Member]
Platform Operator, Crypto Asset [Line Items]
Total liabilities
Fair Value, Inputs, Level 2 [Member]
Platform Operator, Crypto Asset [Line Items]
Total assets
Total liabilities
Fair Value, Inputs, Level 2 [Member] | Warrant Derivative Liability [Member]
Platform Operator, Crypto Asset [Line Items]
Total liabilities
Fair Value, Inputs, Level 3 [Member]
Platform Operator, Crypto Asset [Line Items]
Total assets
Total liabilities	5,721,688	2,453,100
Fair Value, Inputs, Level 3 [Member] | Warrant Derivative Liability [Member]
Platform Operator, Crypto Asset [Line Items]
Total liabilities	$ 5,721,688	$ 2,453,100

v3.24.1.1.u2

Schedule of Warrant Derivative Liability Measured at Fair Value (Details)	3 Months Ended
	Mar. 31, 2024 USD ($)
Accounting Policies [Abstract]
Warrant derivative liability, beginning balance	$ 2,453,100
Change in fair value of warrant derivative liability	3,268,588
Warrant derivative liability, ending balance	$ 5,721,688

v3.24.1.1.u2

Summary of Significant Accounting Policies (Details Narrative) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Product Information [Line Items]
Allowance for doubtful accounts	$ 0		$ 1,840
Third party outsourcing	1,509,600	$ 1,937,000
Cost of goods sold	1,820,645	1,850,387
Advertising costs	337,364	$ 479,866
Cash	5,605,035		$ 6,359,646
Cash FDIC insured amount	250,000
Cash SIPC insured amount	$ 500,000
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Two Customers [Member]
Product Information [Line Items]
Concentration Risk, Percentage	72.00%
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Largest Customer [Member]
Product Information [Line Items]
Concentration Risk, Percentage	46.00%	59.00%
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Second Largest Customer [Member]
Product Information [Line Items]
Concentration Risk, Percentage	26.00%
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Three Customers [Member]
Product Information [Line Items]
Concentration Risk, Percentage	80.00%	11.00%
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Third Largest Customers [Member]
Product Information [Line Items]
Concentration Risk, Percentage		10.00%
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | No Customer [Member]
Product Information [Line Items]
Concentration Risk, Percentage	10.00%	10.00%	10.00%
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | One Customer [Member]
Product Information [Line Items]
Concentration Risk, Percentage		57.00%
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Two Customers [Member]
Product Information [Line Items]
Concentration Risk, Percentage	81.00%
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Largest Customer [Member]
Product Information [Line Items]
Concentration Risk, Percentage	61.00%
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Other Customer [Member]
Product Information [Line Items]
Concentration Risk, Percentage	20.00%
Accounts Receivable [Member] | Customer Concentration Risk [Member] | One Customer [Member]
Product Information [Line Items]
Concentration Risk, Percentage			18.00%
Cost of Goods and Service Benchmark [Member] | Supplier Concentration Risk [Member] | One Manufacturer [Member]
Product Information [Line Items]
Concentration Risk, Percentage	40.00%	49.00%
Cost of Goods and Service Benchmark [Member] | Supplier Concentration Risk [Member] | Vendor [Member]
Product Information [Line Items]
Concentration Risk, Percentage	10.00%	13.00%
Cost of Goods and Service Benchmark [Member] | Supplier Concentration Risk [Member] | No Other Vendor [Member]
Product Information [Line Items]
Concentration Risk, Percentage	10.00%	10.00%
Accounts Payable [Member] | Customer Concentration Risk [Member] | No Other Vendor [Member]
Product Information [Line Items]
Concentration Risk, Percentage	10.00%		10.00%
Accounts Payable [Member] | Customer Concentration Risk [Member] | Two Vendors [Member]
Product Information [Line Items]
Concentration Risk, Percentage	82.00%
Accounts Payable [Member] | Customer Concentration Risk [Member] | One Vendor [Member]
Product Information [Line Items]
Concentration Risk, Percentage	72.00%		91.00%
Accounts Payable [Member] | Customer Concentration Risk [Member] | Second Vendor [Member]
Product Information [Line Items]
Concentration Risk, Percentage	10.00%
Shipping and Handling [Member]
Product Information [Line Items]
Cost of goods sold	$ 102,435	$ 146,820

v3.24.1.1.u2

Schedule of Inventories (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Inventory Disclosure [Abstract]
Raw materials	$ 35,405	$ 35,404
Finished products	2,098,808	2,641,708
Inventories, net	$ 2,134,213	$ 2,677,112

v3.24.1.1.u2

Operating Leases (Details Narrative)	3 Months Ended
	Mar. 31, 2024 USD ($)
Operating Leases
Operating lease payments	$ 3,000

v3.24.1.1.u2

Schedule of Warrant Derivative Liability (Details)	Mar. 31, 2024 USD ($) $ / shares	Dec. 31, 2023 USD ($) $ / shares	Jan. 31, 2023 $ / shares
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Total fair value | $	$ 5,721,688	$ 2,453,100
Series A Warrants [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Exercise price	$ 7.57	$ 7.57	$ 7.57
Total fair value | $	$ 5,721,688	$ 2,453,100
Series A Warrants [Member] | Measurement Input, Share Price [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Common stock market price	$ 9.09	$ 5.34
Series A Warrants [Member] | Measurement Input, Exercise Price [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Exercise price	$ 7.57	$ 7.57
Series A Warrants [Member] | Measurement Input, Expected Term [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Warrant liability, measurement input, expected life (years)	2 years 10 months 24 days	3 years 1 month 24 days
Series A Warrants [Member] | Measurement Input, Price Volatility [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Warrant liability, measurement input	191.60	97.60
Series A Warrants [Member] | Measurement Input, Expected Dividend Rate [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Warrant liability, measurement input
Series A Warrants [Member] | Measurement Input, Risk Free Interest Rate [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Warrant liability, measurement input	4.40	4.10

v3.24.1.1.u2

Warrant Derivative Liability (Details Narrative) - USD ($)	Mar. 31, 2024	Dec. 31, 2023	Jan. 31, 2023
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Fair value of the warrant liability	$ 5,721,688	$ 2,453,100
Series A Warrants [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Class of warrant or right	690,100	740,000
Exercise price of warrants	$ 7.57	$ 7.57	$ 7.57

v3.24.1.1.u2

Redeemable Preferred Stock (Temporary Equity, redeemed in full in February 2023) (Details Narrative) - USD ($)		3 Months Ended
	Nov. 29, 2022	Mar. 31, 2023
Class of Stock [Line Items]
Preferred stock redemption amount		$ 5,250,000
Proceeds from issuance of preferred stock		4,750,000
Proceeds from issuance of preferred stock additional		$ 500,000
Redemption price percentage		105.00%
Series C Convertible Redeemable Preferred Stock [Member] | Private Placement [Member]
Class of Stock [Line Items]
Series D convertible redeemable preferred stock, shares	495,000
Series D Redeemable Preferred Stock [Member] | Private Placement [Member]
Class of Stock [Line Items]
Series D convertible redeemable preferred stock, shares	5,000

v3.24.1.1.u2

Schedule of Warrants Activity (Details)	3 Months Ended
	Mar. 31, 2024 $ / shares shares
Accumulated Other Comprehensive Income (Loss) [Line Items]
Shares, Ending Balance	736,438
Warrant [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Shares, Beginning Balance	786,701
Weighted Average Exercise Price, Beginning Balance | $ / shares	$ 8.96
Weighted Average Remaining Contractual Term (Years), Beginning Balance	3 years 1 month 13 days
Shares, Granted
Weighted Average Exercise Price, Granted | $ / shares
Shares, Forfeitures
Weighted Average Exercise Price, Forfeitures | $ / shares
Shares, Expirations	(363)
Weighted Average Exercise Price, Expirations | $ / shares
Shares, Exercised	(49,900)
Weighted Average Exercise Price, Exercised | $ / shares
Shares, Ending Balance	736,438
Weighted Average Exercise Price, Ending Balance | $ / shares	$ 9.00
Weighted Average Remaining Contractual Term (Years), Ending Balance	2 years 10 months 13 days

v3.24.1.1.u2

Schedule of Exercise Price of Warrants Outstanding and Exercisable (Details)	Mar. 31, 2024 $ / shares shares
Accumulated Other Comprehensive Income (Loss) [Line Items]
Warrants Outstanding and Exercisable (Shares)	736,438
Warrant One [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Warrants Outstanding and Exercisable (Shares)	727,100
Exercise Prices | $ / shares	$ 7.57
Warrant Two [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Warrants Outstanding and Exercisable (Shares)	9,338
Exercise Prices | $ / shares	$ 120.00

v3.24.1.1.u2

Schedule of Share-based Compensation, Stock Options, Activity (Details) - $ / shares	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Equity [Abstract]
Shares Outstanding, Beginning Balance	20,577
Weighted Average Exercise Price Outstanding, Beginning Balance	$ 77.72
Weighted Average Remaining Contractual Term (Years) Outstanding, Ending Balance	7 years 4 months 20 days		7 years 7 months 6 days
Shares, Granted
Weighted Average Exercise Price, Granted
Shares, Forfeitures
Weighted Average Exercise Price, Forfeitures
Shares, Expirations
Weighted Average Exercise Price, Expirations
Shares, Exercised
Weighted Average Exercise Price, Exercised
Shares Outstanding, Ending Balance	20,577		20,577
Weighted Average Exercise Price Outstanding, Ending Balance	$ 77.72		$ 77.72
Shares Exercisable, Ending Balance	13,153
Weighted Average Exercise Price Exercisable, Ending Balance	$ 116.19
Weighted Average Remaining Contractual Term (Years) Exercisable, Ending Balance	6 years 9 months 3 days

v3.24.1.1.u2

Schedule of Exercise Price of Options Outstanding and Exercisable (Details) - $ / shares	Mar. 31, 2024	Dec. 31, 2023
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Options Outstanding (Shares)	20,577	20,577
Options Exercisable (Shares)	13,153
Exercise Price One [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Options Outstanding (Shares)	10,000
Options Exercisable (Shares)	3,750
Exercise Prices	$ 6.01
Exercise Price Two [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Options Outstanding (Shares)	1,344
Options Exercisable (Shares)	1,344
Exercise Prices	$ 7.35
Exercise Price Three [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Options Outstanding (Shares)	1,344
Options Exercisable (Shares)	504
Exercise Prices	$ 7.78
Exercise Price Four [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Options Outstanding (Shares)	841
Options Exercisable (Shares)	841
Exercise Prices	$ 45.50
Exercise Price Five [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Options Outstanding (Shares)	1,002
Options Exercisable (Shares)	668
Exercise Prices	$ 80.50
Exercise Price Six [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Options Outstanding (Shares)	1,008
Options Exercisable (Shares)	1,008
Exercise Prices	$ 88.00
Exercise Price Seven [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Options Outstanding (Shares)	840
Options Exercisable (Shares)	840
Exercise Prices	$ 116.70
Exercise Price Eight [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Options Outstanding (Shares)	336
Options Exercisable (Shares)	336
Exercise Prices	$ 162.33
Exercise Price Nine [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Options Outstanding (Shares)	3,862
Options Exercisable (Shares)	3,862
Exercise Prices	$ 300.00

v3.24.1.1.u2

Schedule of Non Vested Restricted Common Stock Activity (Details)	3 Months Ended
	Mar. 31, 2024 $ / shares shares
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of shares, Non-vested shares, ending	7,424
Restricted Common Stock [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of shares, Non-vested shares, beginning	333
Fair value of shares, Non-vested shares, beginning | $ / shares	$ 80.50
Number of shares, Granted
Fair value of shares, Granted | $ / shares
Number of shares, Vested
Fair value of shares, Vested | $ / shares
Number of shares, Forfeited
Fair value of shares, Forfeited | $ / shares
Number of shares, Non-vested shares, ending	333
Fair value of shares, Non-vested shares, ending | $ / shares	$ 80.50

v3.24.1.1.u2

Stockholders’ Equity (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Jan. 30, 2024	Dec. 31, 2023
Accumulated Other Comprehensive Income (Loss) [Line Items]
Common stock, shares authorized	250,000,000			250,000,000
Common stock, par value	$ 0.001			$ 0.001
Common stock, shares issued	1,284,156			1,275,238
Common stock, shares outstanding	1,284,156			1,275,238
Series A warrants exercised
Warrants outstanding			$ 5,700,000
Shares options, granted
Share based compensation	$ 12,615	$ 25,182
Unvested option	7,424
Grand date fair value	$ 123,000
Amortized period	4 years 6 months
Closing stock price	$ 9.02
Aggregate intrinsic value of options outstanding	$ 34,138
Number of shares granted of restricted stock	0
Restricted Stock [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Number of shares granted of restricted stock		0
Share-based compensation expense	$ 2,170	$ 5,329
Unvested compensation award	$ 2,170
Unvested options, amortized year	3 months
Warrant [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Series A warrants exercised	49,900
Issuance of common stock	8,918
Share issued price per share	$ 9.02
Warrants outstanding	$ 1,054,295

v3.24.1.1.u2

Commitments and Contingencies (Details Narrative)	Jan. 30, 2024 USD ($)
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Proceeds from Divestiture of Businesses	$ 17,200,000
Warrant liability	5,700,000
Equity Purchase Agreement [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Proceeds from Divestiture of Businesses	17,200,000
Escrow Deposit	$ 1,700,000

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