Guardion Health Sciences has promoted Katie Cox to be its Chief Accounting Officer. She replaces Jeffrey Benjamin, who has resigned. The CAO role is the most senior financial position in the company.
Guardion is a clinical nutrition company. Its main product is Viactiv, a line of supplement chews for bone health. The company is based in the Greenway Plaza area of Houston, having moved its head office from San Diego in 2021. It has a market capitalization of $10 million.
Disastrous Acquisition
Guardion is suffering from a disastrous acquisition made in June 2021. It paid $26 million in cash for the business that owned Viactiv. The product is sold in retailers such as Walmart and Target. Starting in late 2021, the company experienced supply chain issues that resulted in a lack of inventory at the retailers. In fact, the company ended up paying $83,000 in out-of-stock fees to the retailers in 2022.
At the end of 2021, Guardion wrote off $12 million in goodwill related to the acquisition because its market cap was below the carrying value of its assets. In 2022, it wrote off $10 million, the value of intangible assets that it had acquired.
Change of Control clause
Ms. Cox joined the company in June 2022 as the Head of Financial Planning and Analysis. Prior to that, she spent nearly three years as Director of FP&A at Catalent Pharma Solutions and ten years as a Finance Manager in a subsidiary of Baxter International.
Ms. Cox will receive a base salary of $225,000. She will also get a $50,000 retention bonus immediately following a Change of Control transaction. She will get another $50,000 if the Change of Control transaction doesn’t happen by December 31, 2023.
Craig Sheehan, the Chief Commercial Officer, recently entered into a bonus agreement with a similar bonus structure except his refers to either a Change of Control transaction or the sale of the Viactiv brand.
Jeffrey Benjamin was appointed CAO in August 2021, following the departure of CFO Andrew Schmidt. Mr. Benjamin joined the company in April 2021.
New CEO
In June, CEO Bret Scholtes stepped down as CEO after two-and-a-half years in the role. The company appointed Jan Hall as its new CEO. Ms. Hall has worked for Johnson & Johnson and Coca-Cola and most recently was CEO of M2 Ingredients.
SEC filing – 8-K – Guardion CAO