Healthy Extracts Reports First Quarter 2023 Results

LAS VEGAS, May 15, 2023 (GLOBE NEWSWIRE) — Healthy Extracts Inc. (OTCQB: HYEX), a leading developer and distributor of plant-based nutraceutical products for heart and brain health, reported results for the first quarter ended March 31, 2023. All comparisons are to the year-ago period unless otherwise noted. First Quarter Financial Highlights Net revenue totaled $615,000, up 11%, driven by product line and distribution channel expansion.Increased manufacturing and freight costs resulted in gross margin declining to 45.2% from 58.9% in the year-ago quarter. Gross margins are expected to return to normal levels in the second half of 2023 with the anticipated lowering of these costs.Net loss for the quarter, which was primarily due to costs related to increased manufacturing and freight costs, costs associated with the company’s previously announced corporate acquisition, and interest expense, totaled $579,000 or $(0.00) per basic and diluted share. Excluding costs related to the company’s planned acquisition and public offering expenses, regulatory expense, change in fair value on derivative expense and interest expense, net loss totaled $135,000. This compares to net income of $3,011 or $0.00 per basic and diluted share in the same year-ago quarter.Cash totaled $213,000 as of March 31, 2023, compared to $66,000 on December 31, 2022, with the increase resulting from financing activity in the first quarter. First Quarter Operational Highlights Subscription customers at March 31, 2023 increased 64% over the previous year. Growth in subscribers helps lower customer acquisition costs and the recurring revenue stream provides greater visibility into future potential revenue.The product line of the company’s brand influencer, Whitney Johns, was featured on Amazon Buy with Prime in celebration of Women’s History Month. Amazon’s selected Whitney Johns for her entrepreneurial spirit, dedication to innovation, being a thought leader in nutrition and fitness, and for launching one of the nation’s premier nutritional product lines for superior health and optimal fitness. These Whitney Johns products are based on Healthy Extracts plant-based proprietary and patented formulations that are supported by numerous independently published studies.Entered agreement to acquire nutraceutical manufacturer Hyperion and its digital marketing affiliate, Online Publishing & Marketing. The closing of this acquisition is subject to certain closing conditions and no assurances can be provided that it will be completed as contemplated. Management Commentary “In Q1, our top-line growth was driven by a continued ramp up in sales, especially through our direct-to-consumer channels, which included continued growth in recurring revenue from product subscriptions,” commented Healthy Extracts president, Duke Pitts. “These results demonstrate how we have established a solid foundation for addressing the fast-growing heart health supplement market with published studies that support our brain health claims. “In preparation for completing our plans to acquire Hyperion and Online Publishing & Marketing, our EVP of sales and marketing, Scott Landers, has begun the initial phase of integrating our companies. We believe these steps will help ensure optimal synergies and efficiencies upon the closing of the transaction, with this driving a substantial increase in revenue from additional product sales. “We are currently preparing for some major new product launches later this year, including the anticipated Whitney Johns ‘gut health’ gel pack. This product will enable us to address the very large and growing global gut health market that is projected to grow at a 7.9% CAGR to reach nearly $72 billion by 2027 according to data published by Fortune Business Insights. “Our other new products under development include natural solutions for optimal sleep breathing, weight loss and glucose management. We expect these to be quickly adopted by our extensive existing customer base who value plant-based products that support their health without negative side effects. “Our new gel pack format for brain and gut health makes their formulations easier and more convenient to consume, with the added benefits of easier digestion and greater absorption. We see our exclusive access to this patented gel technology creating many higher-margin, multi-million-dollar market opportunities and an added competitive advantage. “As we continue to focus on increasing our recurring revenue stream from subscriptions and maintaining our traditional high gross margin, we anticipate both our top and bottom-line to expand over the coming quarters. “We will also continue to pursue strategic acquisitions that would complement our portfolio of plant-based products and leverage our broad distribution channels. Such potential transactions would build upon our acquisitions of BergametNA™ for heart health in 2019 and Ultimate Brain Nutrients™ for brain health in 2020. We believe these acquisitions have laid the foundation for continued growth and broadening market reach.”First Quarter Financial Summary Net revenue in the first quarter of 2023 increased 11% to $615,000 from $552,000 in the same year-ago quarter, primarily due to product line and distribution channel expansion. Gross profit totaled $278,000 or 45.2% of net revenue as compared to $325,000 or 58.9% of net revenue in the same year-ago quarter. The decrease in gross margin was a result of the increase in manufacturing and freight costs. Gross margins are expected to return to normal levels in the second half of 2023. Operating expenses increased $313,000 to $683,000 compared to the same year-ago quarter. The increase in operating expenses was due to increased general and administrative expenses.   Net loss totaled $579,000 or $(0.00) per basic and diluted share compared to a net income of $3,011 or $0.00 per basic and diluted share in the same year-ago quarter. Excluding costs related to the company’s planned acquisition and public offering expenses, regulatory expense, change in fair value on derivative expense and interest expense, net loss totaled $135,000. Cash totaled $213,000 as of March 31, 2023, as compared to $66,000 on December 31, 2022. About Healthy Extracts “Live Life Young Again”Healthy Extracts Inc. is a platform for acquiring, developing, researching, patenting, marketing, and distributing, plant-based proprietary products in select high-growth categories within the multibillion-dollar nutraceuticals market. The company’s subsidiaries, BergametNA™ and Ultimate Brain Nutrients™ (UBN), offer nutraceutical natural heart and brain health supplements. This includes the only heart health supplement distributed in North America containing Citrus Bergamot SuperFruit™. This superfruit is known to have the highest quality and concentration of polyphenols and flavonoids, and with healthy heart benefits backed by multiple published studies. UBN KETONOMICS® proprietary formulations have been shown to support brain health, including memory, cognition, focus and neuro-energy. UBN is pursuing intellectual property license opportunities for monetizing its IP portfolio of multiple issued and pending patents. For more information visit: healthyextractsinc.com, bergametna.com or tryubn.com. Forward-Looking Statements and Safe Harbor Notice All statements made by Healthy Extracts Inc. (the “Company”) other than statements of historical facts included in this press release are “forward-looking statements” (as defined in the Private Securities Litigation Reform Act of 1995). Such forward-looking statements include our expectations and those statements that use forward-looking words such as “believe,” “projected,” “expect,” “possibility,” “anticipate” and similar terminology. The achievement or success of the matters covered by such forward-looking statements involve significant risks, uncertainties and assumptions. Actual results could differ materially from current projections or implied results. Investors should read the risk factors set forth in the Company’s 2022 Annual Report on Form 10-K filed with the SEC on March 31, 2023, and future periodic reports filed with the SEC. All of the Company’s forward-looking statements are expressly qualified by all such risk factors and other cautionary statements. The Company cautions that statements and assumptions made in this news release constitute forward-looking statements and make no guarantee of future performance. Forward-looking statements are based on estimates and opinions of management at the time statements are made. The information set forth herein speaks only as of the date hereof. The Company and its management undertake no obligation to revise these statements following the date of this news release. Food and Drug Administration Disclosure The product and formulation featured in this release is not for use by or sale to persons under the age of 12. This product should be used only as directed on the label. Consult with a physician before use if you have a serious medical condition or use prescription medications. A doctor’s advice should be sought before using this and any supplemental dietary product. These statements have not been evaluated by the FDA. This product is not intended to diagnose, treat, cure or prevent any disease. BergametNA™, Ultimate Brain Nutrients™, UBN™, Citrus Bergamot SuperFruit™ and F4T® are registered trademarks of Healthy Extracts Inc.™ Healthy Extracts Company ContactDuke Pitts, PresidentHealthy Extracts Inc.Tel (720) 463-1004Email contact Investor ContactRonald Both CMA Investor RelationsTel (949) 432-7566Email contactMedia Contact:Tim RandallCMATel (949) 432-7572Email Contact HEALTHY EXTRACTS, INC.CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THREE MONTH ENDING MARCH 31,(Unaudited)       FOR THE THREE MONTHS ENDING  MARCH 31   2023   2022      REVENUE    Gross revenue $614,943  $551,654 Net revenue  614,943   551,654      COST OF REVENUE    Cost of goods sold  320,724   226,949 Written off inventory  16,378   – Total cost of revenue  337,102   226,949      GROSS PROFIT  277,841   324,705      OPERATING EXPENSES    General and administrative  683,029   370,357 Total operating expenses  683,029   370,357      OTHER INCOME (EXPENSE)    Interest expense, net of interest income  (89,060)  (32,957)Change in fair value on derivative  (84,908)  78,978 Loss on extinguishment of debt  –   – SBA loan forgiveness  –   – Gain on sale of asset  –   2,643      Total other income (expense)  (173,968)  48,664      Net gain/(loss) before income tax provision  (579,157)  3,011      NET GAIN/(LOSS) $(579,157) $3,011           Loss per share – basic and diluted $(0.00) $0.00      Weighted average number of shares outstanding – basic and diluted  342,514,810   313,764,817  HEALTHY EXTRACTS, INC.CONSOLIDATED BALANCE SHEETS(Unaudited)     MARCH 31 DECEMBER 31,   2023   2022 ASSETS       CURRENT ASSETS    Cash $213,204  $65,651 Accounts receivable  135,398   105,794 Inventory  1,654,206   1,819,128 Total current assets  2,002,808   1,990,572      Fixed assets, net of accumulated depreciation of $44,709 and $45,474, respectively  4,952   5,501 Patents/Trademarks  521,881   521,881 Deposit  16,890   16,890 Prepaid Acquisition Costs  85,632   53,015 Goodwill  193,260   193,260 Total other assets  822,614   790,546      TOTAL ASSETS $2,825,422  $2,781,118      LIABILITIES AND STOCKHOLDERS’ DEFICIT       LIABILITIES    Accounts payable $114,485  $91,316 Accrued liabilities  85,871   94,554 Notes payable  487,445   275,370 Notes payable – related party  866   866 Convertible debt, net of discount of $0.00 and $0.00, respectively  595,638   317,284 Convertible debt – related party, net of discount of $0.00 and $0.00, respectively  –   – Accrued interest payable  39,023   21,387 Accrued interest payable – related party  –   – Derivative liabilities  186,919   102,011 Total current and total liabilities  1,510,248   902,788      STOCKHOLDERS’ EQUITY (DEFICIT)    Preferred stock, $0.001 par value, 75,000,000 shares authorized, none and none shares issued and outstanding, respectively  –   – Common stock, $0.001 par value, 2,500,000,000 shares authorized, 345,492,442 and 345,172,442 shares issued and outstanding, respectively  345,492   345,172 Additional paid-in capital  17,475,579   17,459,899 Accumulated deficit  (16,505,898)  (15,926,742)Total stockholders’ equity (deficit)  1,315,174   1,878,330      TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) $2,825,422  $2,781,118