YOUNGSVILLE, La., March 13, 2017 (GLOBE NEWSWIRE) -- RedHawk Holdings Corp. (OTCQB:IDNG) (“RedHawk” or the “Company”) announced today a consolidated net loss of $282,027 ($nil per share) on gross revenues of $718,337 for the three month period ended December 31, 2016. Excluding a non-recurring gain of $156,697, the Company reported a net loss of $291,810 ($nil per share) on minimal revenues for the comparable three month period ended December 31, 2015.
The second quarter 2017 results include approximately $562,000 of new product incentive discounts on the Company’s pharmaceutical sales and approximately $58,000 of non-recurring legal fees and transaction costs.
To gain market share, the new product incentive discounts were offered to customers of EcoGen Europe Limited (“EcoGen”) for the sale of certain pharmaceuticals (“NP8’s”) which are outside the United Kingdom’s National Health Services (“NHS”) drug tariff and for sale of certain generic pharmaceuticals known as “specials.” The market for these types of pharmaceuticals is very competitive and substantial discounts are necessary to gain market share. While a small portion of these incentive discounts were offered as a part of current distribution agreements, the Company believes much of these offered incentive discounts will gradually decrease as it transitions to marketing and sales of its branded generic products directly to the NHS’ Clinical Commissioning Groups (“CCG”). RedHawk recently announced that it will commence the sale of its branded generics directly to the first of a total of 212 CCG’s in March 2017. The Company believes the importance of the current sales mix of NP8’s and generic specials will be less significant in the future as its branded generics gain acceptance among the CCG’s.
EcoGen is the Company’s United Kingdom-based pharmaceutical distributor specializing in the manufacturing and marketing of branded generic pharmaceuticals. EcoGen also holds the distribution rights in a number of countries for Zonis®, a patented antimicrobial ionic silver calcium catheter dressing with both wound healing and hemostatic properties. RedHawk recently announced its intentions to increase its ownership position in EcoGen to approximately 50%. In March 2016, RedHawk Pharma UK Ltd, a wholly-owned subsidiary of RedHawk, acquired a 25% stake in EcoGen.
Commenting on the second quarter, fiscal 2017 results, the Company said, “During the second quarter we continued to sacrifice pharmaceutical profit margins so we could continue to gain market share. We believe this strategy to capitalize on business opportunities with CCG’s is working. In March 2017 we will begin delivery of our branded generics to the first CCG. Similar delivery agreements are currently being negotiated with more CCG’s. Additionally, as we continue the transition the product mix of our sales more towards our branded generic pharmaceuticals, the amount of new product incentive discounts will decline and we believe profitability will increase.”
“The unanticipated delays in bringing EcoGen’s branded generics to market has been challenging but RedHawk remains optimistic about EcoGen’s business opportunities in the United Kingdom and other geographic markets. We recently announced our intentions to increase our ownership position in EcoGen to approximately 50% and further ownership increases are possible.”
The Company has now increased its focus on marketing its medical devices:
Sharps and Needle Destruction Device (SANDD)
- Re-engineering of SANDD has been completed;
- Production samples have been approved;
- Marketing of the anti-microbial SANDD mini unit was launched in January 2017;
- Currently negotiating an exclusive long-term distribution agreements for six Middle Eastern countries and for Mexico;
- SANDD Pro model is expected to be launched later in 2017;
- Pre-market clearance from the U.S. Food and Drug Administration for the sale of SANDD in the United States has been received.
WoundClot Surgical – Advance Bleeding Control (“WoundClot”)
- Market acceptance of WoundClot has been slower than expected;
- WoundClot is now accepted onto the NHS Supply Chain for hemostats in the United Kingdom, ensuring availability across all public NHS hospitals;
- We have increased our efforts to further broaden market awareness and penetration of WoundClot, with the addition of a new distributor;
- We believe the increased marketing efforts will soon be rewarded.
Louisiana State University Innovation Park
- We have expanded our medical device warehousing capabilities and administrative offices at the LSU Innovation Park;
- We are now situated to consider offering SANDD and WoundClot into the United States markets;
- Company is working with LSU to gather Medicare approval for SANDD;
- Company is now better positioned to capitalize on various medical device opportunities currently being offered;
- RedHawk has initiated discussions with LSU for the joint design and development of a new needle destruction unit capable of a broader range of needle destruction;
- Further expansion is possible.
About RedHawk Holdings Corp.
RedHawk Holdings Corp., formerly Independence Energy Corp., is a diversified holding company which, through its subsidiaries, is engaged in sales and distribution of medical devices, sales of branded generic pharmaceutical drugs, commercial real estate investment and leasing, sales of point of entry full-body security systems, and specialized financial services. Through its medical products business unit, the Company sells WoundClot Surgical - Advanced Bleeding Control, the Sharps and Needle Destruction Device (SANDD™), the Carotid Artery Digital Non-Contact Thermometer and Zonis®. Its real estate leasing revenues are generated from various commercial properties under long-term lease. Additionally, RedHawk’s real estate investment unit holds limited liability company interest in various commercial restoration projects in Hawaii. The Company’s financial service revenue is from brokerage services earned in connection with debt placement services. RedHawk Energy holds the exclusive U.S. manufacturing and distribution rights for the Centri Controlled Entry System, a unique, closed cabinet, nominal dose transmission full body x-ray scanner.
Cautionary Statement Regarding Forward Looking Statements
This release may contain forward-looking statements. Forward-looking statements are all statements other than statements of historical fact. Statements contained in this release that are not historical facts may be deemed to be forward-looking statements. The words “anticipate,” “may,” “can,” “plans,” “believes,” “estimates,” “expects,” “projects,” “targets,” “intends,” “likely,” “will,” “should,” “to be,” “potential” and any similar expressions are intended to identify those assertions as forward-looking statements.
Investors are cautioned that forward-looking statements are inherently uncertain. Actual performance and results may differ materially from that projected or suggested herein due to certain risks and uncertainties. In evaluating forward-looking statements, you should consider the various factors which may cause actual results to differ materially from any forward-looking statements including those listed in the “Risk Factors” section of our latest 10-K report. Further, the Company may make changes to its business plans that could or will affect its results. Investors are cautioned that the Company will undertake no obligation to update any forward-looking statements.