Executive Summary

Revenue grew 25% year over year to $3.34M on Viactiv strength and the resolution of a June shipment delay; gross margin expanded 290 bps to 43.8% .
Returned to GAAP profitability: net income was $0.37M ($0.29 EPS), driven primarily by a non-cash $1.05M gain from the change in fair value of warrant derivative liabilities; operating loss narrowed 56% YoY to $(0.77)M .
Operating efficiency improved: total opex fell 21% YoY to $2.23M on lower amortization, payroll, stock comp and consulting fees; quarterly operating cash burn improved to $(0.77)M from $(1.28)M a year ago .
No formal quantitative guidance; strategic review with Alantra remains ongoing, positioning potential near-term corporate actions as a key stock catalyst alongside eCommerce momentum (Amazon +~68% in Q3 on the site) .

What Went Well and What Went Wrong

What Went Well

Viactiv topline and margin: Q3 revenue +25% YoY to $3.34M with gross margin +290 bps to 43.8%, supported by lower transportation costs, strong Amazon shipments, and added Omega Boost distribution .
Cost discipline and opex mix: Total opex down 21% YoY to $2.23M, reflecting prior-year amortization no longer recurring, reduced payroll, lower executive stock comp and lower consulting fees .
Management tone: “We are pleased with the progress made during the quarter which was driven by strong topline growth combined with improved operating margins and a reduced cash burn.” — Jan Hall, CEO .

What Went Wrong

Core profitability: Despite improvements, the business remained unprofitable on an operating basis with $(0.77)M loss from operations; GAAP net profit was driven by a non-cash warrant derivative gain, not core operations .
Customer concentration: Two customers accounted for 68% of Q3 revenue, elevating channel risk; one customer represented 47% of Q3 revenue .
Macro/channel headwinds: Management cited softening VMS category volumes, inflation, and drug channel pressure (Rite Aid Chapter 11 store closures) weighing on traffic and requiring forecast adjustments .

Financial Results

Consolidated P&L versus prior periods

Metric	Q3 2022	Q2 2023	Q3 2023
Revenue ($)	$2,663,550	$2,789,817	$3,337,190
Gross Profit ($)	$1,088,184	$1,249,268	$1,460,252
Gross Margin (%)	40.9%	44.8%	43.8%
Total Operating Expenses ($)	$2,827,578	$2,261,914	$2,233,166
Loss from Operations ($)	$(1,739,394)	$(1,012,646)	$(772,914)
Change in FV of Warrant Derivative ($)	$873,200	$(255,300)	$1,050,800
Net Income (Loss) ($)	$(822,912)	$(1,172,411)	$372,633
Diluted EPS ($)	$(0.67)	$(0.93)	$0.29

Key drivers:

Q3 revenue uplift reflects normalization of shipments post a June third-party warehouse expansion that delayed retail shipments into July and strong Amazon channel performance, plus additional Omega Boost distribution .
Margin expansion YoY driven by supply chain cost favorability (notably transportation) and higher sales .
GAAP net profit in Q3 primarily reflects the non-cash warrant derivative gain; the core business still ran an operating loss .

Revenue by product (Q3)

Product Line	Q3 2022	Q3 2023
Clinical Nutrition	$2,663,550	$3,337,190
Other	$0	$0

Selected KPIs and Balance Sheet

KPI / Metric	Q3 2023
Cash used in operations (quarter)	$(766,581)
Cash & Equivalents (period end)	$7,657,309
Working Capital (period end)	$11,407,975
Amazon net sales growth (Q3 on site)	~+68% YoY
Gross Margin (%)	43.8%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
All metrics	FY 2023 / Q4 2023	N/A	N/A	No formal quantitative guidance; strategic review ongoing

Notes: Management reiterated strategic priorities and the ongoing strategic review with Alantra; no specific revenue, margin, opex, or EPS guidance ranges were issued in Q3 materials .

Earnings Call Themes & Trends

No Q3 earnings call transcript was available; themes below reflect management commentary across Q1, Q2 press releases and Q3 MD&A.

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q3 2023)	Trend
eCommerce/Amazon	Q2: Amazon net sales +334% YoY and +124% vs Q1; eCommerce logistics unaffected by June warehouse issue . Q1: Emphasis on strengthening eCommerce capabilities .	Amazon net sales grew ~68% for Q3 on the site; continued DTC and digital focus .	Improving but normalizing growth
Supply chain/inventory	Q2: June shipments delayed due to 3rd-party warehouse expansion; resolved in July . Q1: Higher transportation/3PL costs pressured gross margin .	Shipment delay resolved; cost of goods favorability (lower transportation costs) aided margins .	Easing constraints; cost tailwinds
Inflation/macro	Q1/Q2: Inflation and cost pressures noted .	Ongoing inflation, softening VMS category volumes, drug channel headwinds; Rite Aid Ch.11 closures impacting traffic .	Persistent headwinds
Strategic review/M&A	Q2: Alantra retained; review underway . Q1: Strategic alternatives emphasized .	Review ongoing; near-term value-maximizing alternatives under evaluation .	Ongoing
Product performance (Viactiv/Omega Boost)	Q1: Viactiv revenue +~37% YoY; focus on margin and cost actions . Q2: Omega Boost marketing; broader distribution efforts .	Viactiv drove Q3; Omega Boost added distribution; marketing campaigns performing well vs benchmarks .	Positive execution
Management/organization	Q2: New CEO Jan Hall appointed; new CAO appointed .	New leadership emphasizing brand-building, operating efficiency, and review process .	Transition stabilized

Management Commentary

“We are pleased with the progress made during the quarter which was driven by strong topline growth combined with improved operating margins and a reduced cash burn.” — Jan Hall, CEO .
“We are continuing our efforts to build a clinical nutrition platform and the Viactiv brand… our market position, consumer loyalty and the extendability of the Viactiv brand… provide us with a viable platform… to grow operations, improve financial performance and maximize stockholder value.” — Jan Hall .
On marketing: “We recently implemented a Bold Age advertising campaign for the Viactiv calcium chews that has already seen positive results… Effective advertising, combined with targeted marketing initiatives, product innovations… plus expanded retail and online distribution, will be the engine of future growth…” — Jan Hall (Q2) .

Q&A Highlights

No public Q3 earnings call transcript was available; no Q&A to summarize.

Estimates Context

We were unable to retrieve S&P Global consensus revenue or EPS estimates for Q3 2023 for GHSI; as a result, estimate comparisons are not included. We will update this section if S&P Global consensus becomes available.

Key Takeaways for Investors

Revenue recovery and margin execution: Q3 sales +25% YoY with gross margin +290 bps reflect normalized shipments, lower freight, and channel mix; this underpins improving contribution even as the business remains loss-making at the operating line .
Quality of earnings: GAAP net income was primarily from a non-cash warrant derivative gain; core operations are still in loss—focus on sustained operating profit and cash generation going forward .
Operating discipline: Opex down 21% YoY and quarterly cash burn improved; continued cost control remains a lever for breakeven progress .
Channel concentration risk: Two customers represented 68% of Q3 revenue; diversification and eCommerce growth (Amazon +~68% in Q3 on the site) are critical to de-risk .
Macro/channel watch items: Inflationary pressures, softer VMS volumes, and drug channel traffic (Rite Aid restructuring) weigh on outlook; monitor elasticity and retailer door changes into 2024 .
Strategic optionality as catalyst: The ongoing review with Alantra (potential sale of company/brand, M&A, reverse acquisition) is a meaningful potential stock catalyst; absence of formal guidance keeps focus on updates to the process and operating KPIs .
Balance sheet supports runway: $7.66M cash and $11.41M working capital at 9/30/23 provide liquidity to execute near-term priorities while the review progresses .

Guardion Health Sciences, Inc. (GHSI)·Q3 2023 Earnings Summary