RedHawk Announces First Half Fiscal 2020 Financial Results

Recent Investments Support National Awareness Campaign and Broaden Distribution

LAFAYETTE, Louisiana, Feb. 19, 2020 /PRNewswire/ -- RedHawk Holdings Corp. (OTC: SNDD) (“RedHawk” or the “Company”) a diversified holding company engaged in sales and distribution of medical devices, branded generic pharmaceutical drugs, commercial real estate investment and leasing, point of entry full-body security systems, and specialized financial services, announced today financial results for the three and six month periods of fiscal 2020, ended December 31, 2019.

During the six month period ended December 31, 2019, RedHawk focused on identifying target customer markets, building brand awareness and developing sub-contractor supply chains. During this six month period, RedHawk made substantial financial investments it believed were necessary to build premier B2B and B2C platforms. These investments included approximately $180,000 of start-up costs needed to implement new marketing strategies, develop new advertising and public relations campaigns, and create new social media and sub-contractor supply chain platforms; start-up costs totaling approximately $168,000 for new advisory fees and related non-recurring legal fees; approximately $58,000 of engineering research and development costs for the re-design of the SANDD Pro™; and, approximately $43,000 of introductory sales discounts offered to school systems and law enforcement agencies in Texas, Louisiana and California.

Including these start-up costs, research and development costs and introductory sales discounts, RedHawk reported a net loss from operations of approximately $604,000 on gross revenues of approximately $112,000 for the six month period ended December 31, 2019. Gross profit margins remain strong at approximately 80%, exclusive of initial introductory discounts, which will gradually become unnecessary. This compares to a net loss from operations of approximately $321,000 on gross revenues of approximately $96,000 for the same six month period ended December 31, 2018.

For the second quarter ended December 31, 2019, RedHawk reported a net loss from operations of approximately $409,000 on gross revenues of approximately $47,000. The net loss from operations included approximately $75,000 of new advisory and consulting fees; approximately $95,000 of new marketing, advertising, social media and operating costs; approximately $35,000 of engineering research and development costs; and approximately $28,000 of introductory sales discounts offered to school systems and law enforcement agencies in Texas, Louisiana and California. This compares to a net loss from operations of approximately $213,000 on gross revenues of approximately $48,000 for the same three month period ended December 31, 2018.

Commenting on the December 31, 2019 financial results, G. Darcy Klug, RedHawk’s Chairman and Interim Chief Executive Officer, said, “The results for the three and six month periods ended December 31, 2019 are a reflection of the investment costs we believe were necessary to implement a premier B2B and B2C multi-channel/multi-market marketing strategy, develop a reliable supply chain for both our domestic and international suppliers and engage the administrative support team we believe is needed to execute on our business plan to create national brand awareness for our SANDD™ line of products. These investment costs come at a price. During the three and six month period ended December 31, 2019 we’ve invested into:

• Stellar endorsement agreements including:
  - Dr. Drew Pinsky (commonly known as ‘Dr. Drew”), National Spokesperson
  - Derek Theler, American-born actor, Juvenile Diabetes Spokesperson
• Investor relations campaigns though PCG Advisory, Inc.
• Public relations and advertising campaigns through Valerie Allen PR;
• Website development through Brand Partners Digital Agency;
• Social media platform visibility - Facebook, Instagram, Twitter and LinkedIn;
• Paid search engine optimization through Singer Marketing Solutions Inc.;
• Product placement television market exposure through Tandem Media LLC.

We are beginning to see positive results from this execution of our strategic plan to create national brand awareness for SANDD™. We have now received initial trial orders from a number of law enforcement agencies around the country. While there is no assurance these will result in actual orders, we have received expressions of interest for the possible purchase of both the SANDD mini – FR™ needle incineration devices and the newly designed SANDD Pro™ needle incineration devices from various law enforcement agencies in Louisiana, Texas, California, Michigan, Minnesota, Oregon and Alabama.

Expressions of interest received from school districts have also been encouraging. While there is no assurance these will result in actual orders, we have received expressions of interest for the possible purchase of the SANDD mini – HP™ needle incineration devices from schools in Texas, Louisiana, Mississippi and California.

The list price of both the SANDD mini – FR™ and the SANDD mini – HP™, with AC/DC power connections is $249.99. The list price for the SANDD Pro™ is $449.99. Over time, we believe that the B2B introductory discounts will gradually become unnecessary.

To broaden the geographic and B2B reach of our five (5) dedicated independent sales representatives now operating in Louisiana, Texas, Nevada and the Gulf Coast, we recently partnered with CKRX, a Louisiana-based sales organization. CKRX has eight (8) marketing representatives located in New York, New Jersey, Connecticut, Massachusetts, Florida and Utah, who market a variety of value savings programs to hospitals, physicians, pharmacies and clinics including a free point of sale discount on both branded and generic prescriptions to an estimated 75,000 pharmacies. We believe further geographic expansion is possible through our partnership with CKRX,” concluded Mr. Klug.

About RedHawk Holdings Corp.

RedHawk Holdings Corp., formerly Independence Energy Corp., is a diversified holding company which, through its subsidiaries, is engaged in the 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 the Sharps and Needle Destruction Device (SANDD™), WoundClot Surgical - Advanced Bleeding Control, and the Carotid Artery Digital Non-Contact Thermometer. Through our United Kingdom based subsidiary, we manufacture and market branded generic pharmaceuticals. 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. http://www.redhawkholdingscorp.com

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.

Company Contact:
G. Darcy Klug, Chairman, CEO and CFO
(337) 269-5933
darcy.klug@redhawkholdingscorp.com

Investor Relations:
Stephanie Prince, Managing Director
PCG Advisory
(646) 762-4518
sprince@pcgadvisory.com

Media Contact:
Valerie Allen
Valerie Allen Public Relations
(310) 382-7800
valerie@valerieallenpr.com

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SOURCE RedHawk Holdings Corp.

Company Codes: OTC-QB:SNDD, OtherOTC:SNDD