10-K: Healthy Extracts Inc. Reports Fiscal Year 2024 Results, Focuses on Revenue Growth and Strategic Acquisitions

Healthy Extracts Inc. files its 10-K report, highlighting a focus on revenue growth, margin maintenance, and positive cash flow in the nutraceuticals market.

Summary

• Healthy Extracts Inc. is a platform focused on acquiring, developing, patenting, marketing, and distributing plant-based nutraceuticals.
• The company targets high-growth categories within the nutraceuticals market, including heart, brain, and immune health.
• The overall nutraceutical market is growing at a 7.8% CAGR and is expected to reach $441 billion by 2026.
• BergaMet products address a global heart-health ingredients market projected to grow at a 4.6% CAGR to reach $55.3 billion by 2027.
• UBN products tap into the brain health market, which is growing at a 9.4% CAGR and is expected to reach $15.7 billion by 2030.
• The company's net loss from inception to December 31, 2024, was $19,240,344, with cash resources of $112,020.
• Healthy Extracts plans to expand its product portfolio and sales channels, and evaluate potential acquisition opportunities.
• Revenue for the year ended December 31, 2024, was $3,113,279, compared to $2,485,866 for the year ended December 31, 2023.
• The company's net loss for the year ended December 31, 2024, was $(840,671), compared to $(2,472,931) for the year ended December 31, 2023.

Sentiment

Score: 5

Explanation: The document presents a mixed sentiment. While revenue increased and net loss decreased, the company still faces significant financial challenges, including a large accumulated deficit and limited cash resources. The need for additional financing and the presence of material weaknesses in internal control over financial reporting further temper the outlook.

Positives

• Revenue increased by 25% from 2023 to 2024, reaching $3,113,279.
• Net loss decreased significantly from $(2,472,931) in 2023 to $(840,671) in 2024.
• The company has high gross margin categories, ranging from 60% to 70%.
• Healthy Extracts is planning to expand its product portfolio and sales channels.
• The company is actively evaluating potential acquisition opportunities.

Negatives

• The company has an accumulated deficit of $19,240,344 as of December 31, 2024.
• The company had limited cash resources of $112,020 as of December 31, 2024.
• The company's auditors report reflects that its ability to continue as a going concern is dependent upon its ability to raise additional capital.
• The company relies on a single supplier relationship for licensing and manufacturing.
• The company is not profitable and does not expect to be profitable in the near future.

Risks

• The company's ability to continue as a going concern is dependent on raising additional capital and achieving significant operating revenues.
• The company faces intense competition from larger, more established competitors.
• The company is dependent on outside suppliers for raw materials without long-term agreements.
• The company will require additional financing in the future, which may not be available on acceptable terms.
• One shareholder has the ability to substantially influence all matters submitted to stockholders for approval.
• The company is subject to extensive governmental regulations.
• The company identified material weaknesses in its internal control over financial reporting.

Future Outlook

The company plans to expand its product portfolio to include supplements that support CoQ10, weight management, hydration and gut health, and further expand its sales channels and evaluate potential acquisition opportunities.

Management Comments

• Over the last year, we have focused on increasing revenue, maintaining our margins, and generating positive cash flow from our existing operations.
• In part, we have been successful in meeting these objectives and our business has remained relatively unchanged.

Industry Context

The company operates in the growing nutraceuticals market, targeting specific segments like heart, brain, and immune health, which are driven by changing lifestyles, an aging population, and a desire for natural health solutions.

Comparison to Industry Standards

• The nutraceutical market is growing at a 7.8% CAGR, according to ReportLinker.
• The global heart-health ingredients market is projected to grow at a 4.6% CAGR to reach $55.3 billion by 2027, according to ResearchAndMarkets.
• The brain health market is growing at a 9.4% CAGR and is expected to reach $15.7 billion by 2030, according to Grandview Research.
• The company competes with other manufacturers, distributors, and marketers of vitamins, minerals, herbs, and other nutritional supplements.
• One key competitor is Ortho Molecular, who distributors through medical offices and sells a 38% BPF product, while Healthy Extracts BergaMet PRO+ product has 47% BPF Gold potency.

Legal Proceedings

• BergaMet NA, LLC, received a warning letter from the FDA regarding claims about its Cholesterol Command product; the company responded and is awaiting further action.

Related Party Transactions

• The company has entered into numerous transactions with Jay Decker, its majority shareholder, including acquisitions and debt issuances.

Stakeholder Impact

• Shareholders face the risk of dilution from future capital raises.
• The company's ability to continue as a going concern impacts the value of shareholder investments.
• Employees' job security is dependent on the company's financial stability.
• Customers may be affected by changes in product offerings or service quality.
• Suppliers and creditors face potential risks related to the company's ability to meet its obligations.

Next Steps

• Expand product portfolio to include supplements that support CoQ10, weight management, hydration and gut health.
• Further expand sales channels.
• Evaluate potential acquisition opportunities.
• Remediate material weaknesses in internal control over financial reporting.

Key Dates

Keywords

nutraceuticals, heart health, brain health, immune health, revenue growth, strategic acquisitions, BergaMet, UBN, financial results, Healthy Extracts Inc.