Vystar Corp (VYST)·Q1 2015 Earnings Summary

Executive Summary

• Q1 2015 results were weak: revenue fell 52.8% year over year to $0.10M, gross margin was $35k, and net loss was $0.42M (EPS -$0.01). Sequentially, revenue declined versus Q3 2014, and margins remained thin amid higher G&A, reflecting soft Kiron contributions and limited Vytex monetization .
• Management attributes the revenue decline primarily to Kiron: prior-year Q1 included retroactive reimbursements; the current quarter saw fewer referrals and an extended vacation of the medical director, pressuring volumes and mix .
• Strategic progress continued in consumer bedding: an exclusive U.S. distribution deal (Nature’s Home Solutions) and Gold Bond’s launch of Vytex mattresses/pillows; management also cited near-term trials for Vytex medical gloves with a large outpatient provider as commercialization catalysts .
• Liquidity remains constrained with a ~$2.0M working capital deficit and “substantial doubt” about going concern absent added financing and improved revenue trajectory; equity raises continued during Q1 2015 to bridge cash needs, and leadership changes occurred around the CFO role .

What Went Well and What Went Wrong

• What Went Well

  • Bedding commercialization milestones: exclusive U.S. distribution for Vytex foam products (Nature’s Home Solutions) and Gold Bond’s launch of Vytex mattresses, toppers, and pillows at High Point in April 2015; management expects related revenue in 1H15 .
  • Large healthcare customer glove trials: “One of the largest national outpatient healthcare corporations in the U.S. is now prepping to trial Vytex disposable medical gloves,” opening doors to broader healthcare uptake .
  • Management tone on 2015: “We are on track for improved financial performance in 2015… we believe 2015 will be our best year to date for sales and revenue,” highlighting pipeline confidence across Kiron and Vytex applications (gloves, mattresses/pillows/toppers) .

• What Went Wrong

  • Top-line pressure: consolidated revenue dropped 52.8% YoY to $0.10M, with consolidated gross profit down 72.7% YoY; the decline was mainly Kiron-related (absence of prior-year reimbursement catch-up, fewer referrals, medical director vacation) .
  • Cost structure/investments: operating expenses (G&A) increased 30.3% YoY due to bad debt expense at Kiron and higher accounting/CFO costs, expanding the operating loss despite very low revenue .
  • Liquidity/going concern: cash was $0.15M vs. ~$3.0M in total liabilities; management flagged substantial doubt about continuing as a going concern without additional financing and/or better revenue conversion from initiatives .

Financial Results

Revenue, profitability, and EPS – prior quarters vs current:

Margins and capitalization KPIs:

Segment Disclosure (context – FY 2014):

• FY14 revenue: Vystar (Vytex) $52,814; Kiron $598,177 (consolidated $650,991). Q1 2015 did not break out segment revenue in filings .

Estimates vs Actuals (Q1 2015):

• Wall Street (S&P Global) consensus for revenue/EPS was unavailable for VYST; no comparison to estimates can be made (tool retrieval limit during query) [attempted via S&P Global GetEstimates].

Guidance Changes

Earnings Call Themes & Trends

Note: No Q1 2015 earnings call transcript found; themes summarized from 10-Q MD&A and the April 23, 2015 press release.

Management Commentary

• Strategic focus: “We are on track for improved financial performance in 2015… we believe 2015 will be our best year to date for sales and revenue… moving the company toward profitability.” – William Doyle, CEO .
• Bedding channel: Exclusive domestic distribution agreement for Vytex NRL foam (Nature’s Home Solutions), with Gold Bond launching Vytex mattresses, toppers, and pillows at High Point in mid‑April; Vystar expects related revenue in 1H15 .
• Healthcare channel: A large national outpatient healthcare corporation is preparing to trial Vytex disposable medical gloves, a potential door-opener for broader healthcare adoption .
• Operating context: Q1 revenue decline driven by Kiron factors (prior-period reimbursement timing, referral softness, medical director vacation); OpEx rose on bad debts and CFO services; going-concern uncertainty remains pending financing and revenue execution .

Q&A Highlights

• No Q1 2015 earnings call transcript or Q&A was available in filings; no analyst Q&A themes to report [ListDocuments search returned none for Q1 2015 earnings-call-transcript].

Estimates Context

• We attempted to retrieve S&P Global consensus for Q1 2015 revenue and EPS but were unable due to a system request limit; as a result, no comparison to Wall Street estimates is provided for this quarter (consensus unavailable for VYST at time of query) [attempted via S&P Global GetEstimates].

Key Takeaways for Investors

• Q1 2015 softness was predominantly Kiron-driven; the absence of prior-year reimbursement catch-up, fewer referrals, and a temporary medical director gap hit volumes and revenue, while bad debt and CFO costs lifted OpEx .
• Bedding commercialization has crossed into market launch: NHS distribution and Gold Bond products create a tangible path to Vytex revenue in 1H15 and beyond, a key near-term catalyst .
• Healthcare glove trials with a large outpatient provider represent an additional commercialization vector; successful trials could expand Vytex into broader medical channels over time .
• Liquidity remains the main risk: ~$0.15M cash vs. ~$3.0M liabilities and a ~$2.0M working capital deficit; management explicitly flags substantial doubt about going concern absent financing and revenue acceleration .
• Equity issuance continued in Q1 to fund operations; share count has risen significantly vs. mid‑2014, diluting per‑share metrics while buying runway to execute on bedding/healthcare catalysts .
• Near-term trading setup hinges on evidence of order flow from NHS/Gold Bond and glove trials; any 8‑K updates on commercialization wins or capital raises could drive volatility given the company’s small float and liquidity posture .

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Supporting quantitative exhibits and source citations:

• Q1 2015 financial statements and MD&A: revenue, margins, OpEx, cash flow, going concern, and liquidity .
• Prior quarters for trend analysis (Q2 and Q3 2014): operations and cash metrics, MD&A context .
• 8‑K press release (April 23–24, 2015): distribution agreement, Gold Bond launch, glove trials, and management quotes .
• FY 2014 10‑K: segment revenue context, liquidity/financing narrative .