Eden Prairie, MN, Aug. 15, 2022 (GLOBE NEWSWIRE) -- via NewMediaWire -- SANUWAVE Health, Inc. (OTCPK: SNWV), a leading provider of next-generation wound care products, reported financial results for their second quarter ending June 30, 2022, with the SEC on Friday, August 12, 2022. The Company will host a live conference call on Tuesday, August 16, 2022, at 12:30 (EDT) to provide a business update (Dial-in information below).
Quarter Highlights:
- Over 50 systems placed to treat wounds
- 100% increase from the 25 systems placed in Q2 2021
- Over 40,000 wound treatments administered
- Up from 31,000 treatments administered in Q2 2021
- Successfully completed MDSAP audit
- Company transitioned from Suwanee, GA to Eden Prairie, MN
- Became current on SEC filings
- Launched Cosmetic and Orthopedics verticals with initial sales in each
“Our key ENERGY FIRST products, dermaPACE® and UltraMIST®, continue to show strong acceptance and growth due to their robust clinical and financial profiles and increasingly attractive reimbursement, driven by a shift in payor focus to evidence-based medicine in wound care. As our devices ship and our footprint widens, it has allowed the company to build a high degree of recurring usage revenue. This effort has been hampered over the past year as the company has also spent significant time and effort on fixing our accounting implementation that did not go as planned. Disruption from this process flow issue led to late filings, which led to our issues on the OTC and Pink Sheets. It also had a significant financial impact as it drew attention and resources away from growth. That is in the past, and as we sit today, we are now timely and current in our SEC filings, and the excessive outside costs to fix the problem have abated, lowering our break-even point. The company is now positioned to focus on profitable growth as we capture the opportunity in the wound care space,” stated Kevin Richardson, CEO.
Quarter Financial Results
Revenues for the quarter, starting April 1, 2022, and ending June 30, 2022, came in at $3.9 million, an increase of $1 million or 33% when compared to the $ 2.9 million for the same period in 2021. The increased revenue was primarily driven by an increase in sales of the UltraMIST system. The company moved manufacturing from Georgia to Minnesota, which impacted the timing of international shipments resulting in a $100,000 reduction in international revenue year-over-year.
Gross margin increased to 72% from 64% as cost of revenue remained flat. The improvements were driven due to product mix and more efficient customer service and shipping.
Operating loss was $2 million compared to $4 million in the year prior. The improvement is due to an increase in gross income and a reduction in sales, marketing, and R&D expenses.
Conference Call
SANUWAVE Health, Inc. will host a live conference call on Tuesday, August 16, 2022, at 12:30 (EDT) to discuss recent business activity, provide an update on SEC filings, and detail strategic initiatives. A visual presentation accompaniment will be made available Tuesday morning via SANUWAVE’s website (https://sanuwave.com/about-us/news/).
Telephone access to the call will be available by dialing the following numbers:
Toll-Free: 1-877-407-0784
International: 1-201-689-8560
A replay will be made available through August 30, 2022:
Toll-Free: 1-844-512-2921
International: 1-412-317-6671
Replay Passcode: 13732361
About SANUWAVE
SANUWAVE Health is focused on the research, development, and commercialization of its patented, non-invasive and biological response-activating medical systems for the repair and regeneration of skin, musculoskeletal tissue, and vascular structures.
SANUWAVE’s ENERGY FIRST wound care portfolio consists of regenerative medicine products and product candidates help restore the body’s normal healing processes. SANUWAVE applies and researches its patented energy transfer technologies in wound healing, orthopedic/spine, aesthetic/cosmetic, and cardiac/endovascular conditions.
Forward-Looking Statements
This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements relating to financial results and plans for future business development activities and are thus prospective. Forward-looking statements include all statements that are not statements of historical fact regarding intent, belief or current expectations of the Company, its directors or its officers. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are beyond the Company’s ability to control. Actual results may differ materially from those projected in the forward-looking statements. Among the key risks, assumptions and factors that may affect operating results, performance and financial condition are risks associated with the regulatory approval and marketing of the Company’s product candidates and products, unproven pre-clinical and clinical development activities, regulatory oversight, the Company’s ability to manage its capital resource issues, competition, and the other factors discussed in detail in the Company’s periodic filings with the Securities and Exchange Commission. The Company undertakes no obligation to update any forward-looking statement.
MEDIA CONTACT:
Sabrina Ruelle
Senior Director, Marketing & Program Management
Sabrina.Ruelle@Sanuwave.com
INVESTOR RELATIONS CONTACT:
Kevin Richardson II
Chief Executive Officer
Investor.relations@Sanuwave.com
| CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | ||||
| 3 Months Ended | 6 Months Ended | |||
| Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
| Revenues: | ||||
| Total Revenue | $ 3,882 | $ 2,909 | $ 7,077 | $ 5,025 |
| Cost of Revenues | 1,096 | 1,048 | 1,986 | 2,103 |
| Gross Margin | 2,786 | 1,861 | 5,091 | 2,922 |
| Operating Expenses: | ||||
| General and administrative | 2,937 | 2,923 | 5,078 | 6,045 |
| Selling and marketing | 1,672 | 2,520 | 3,387 | 4,300 |
| Research and development | 171 | 272 | 337 | 626 |
| Gain on sale of property and equipment, net | -136 | 0 | -690 | 0 |
| Depreciation and amortization | 210 | 192 | 386 | 391 |
| Total Operating Expenses | 4,854 | 5,907 | 8,498 | 11,362 |
| Operating Loss | -2,068 | -4,046 | -3,407 | -8,440 |
| Other Income (Expense): | ||||
| Interest expense | -2,826 | -1,437 | -5,903 | -2,559 |
| Interest expense, related party | -56 | -48 | -112 | -95 |
| Change in fair value of derivative liabilities | 7,861 | -591 | 11,343 | 44 |
| Loss on issuance of debt | 0 | -2,484 | -3,434 | -2,484 |
| Loss on extinguishment of debt | -211 | 0 | -211 | 0 |
| Gain / (loss) on foreign currency exchange | 2 | -3 | 2 | 4 |
| Other Income (Expense), net | 4,770 | -4,563 | 1,685 | -5,090 |
| Net Loss before Income Taxes | 2,702 | -8,609 | -1,722 | -13,530 |
| Provision for Income Taxes | 0 | 6 | 0 | 22 |
| Net Income (loss) | 2,702 | -8,615 | -1,722 | -13,552 |
| Other Comprehensive Income (Loss) | ||||
| Foreign currency translation adjustments | 0 | -3 | 0 | -11 |
| Total Comprehensive Income (Loss) | $ 2,702 | $ (8,618) | $ (1,722) | $ (13,563) |
| Gain (loss) per Share: | ||||
| Basic (in dollars per share) | $ 0.01 | $ (0.02) | $ 0 | $ (0.03) |
| Diluted (in dollars per share) | $ 0 | $ (0.02) | $ 0 | $ (0.03) |
| Weighted average shares outstanding, basic and diluted | ||||
| Basic (in shares) | 538,560,051 | 518,310,781 | 532,589,825 | 518,400,008 |
| Diluted (in shares) | 871,984,091 | 518,310,781 | 532,589,825 | 518,400,008 |
| Accessory and Parts Revenue [Member] | ||||
| CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | ||
| Current Assets: | Jun. 30, 2022 | Dec. 31, 2021 |
| Cash | $ 1,484 | $ 619 |
| Accounts receivable, net of allowance for doubtful accounts of $0.8 million, respectively | 1,749 | 2,415 |
| Inventory | 925 | 1,040 |
| Prepaid expenses and other current assets | 1,181 | 326 |
| Total Current Assets | 5,339 | 4,400 |
| Property, Equipment and Other, net | 535 | 1,118 |
| Other Intangible Assets, net | 5,489 | 5,841 |
| Goodwill | 7,260 | 7,260 |
| Total Assets | 18,623 | 18,619 |
| Current Liabilities: | ||
| Senior secured promissory note payable, in default | 12,334 | 11,586 |
| Convertible promissory notes payable, in default | 6,523 | 11,601 |
| Convertible promissory notes, related parties, in default | 1,596 | 1,596 |
| Short-term loans | 1,484 | 0 |
| Advances on future cash receipts | 398 | 446 |
| Accounts payable | 7,083 | 7,644 |
| Accrued expenses | 5,900 | 4,394 |
| Accrued employee compensation | 4,264 | 4,247 |
| Due under factoring agreement | 1,792 | 1,737 |
| Warrant liability | 5,295 | 9,614 |
| Current portion of SBA loans | 272 | 158 |
| Accrued interest | 3,600 | 2,521 |
| Accrued interest, related parties | 402 | 289 |
| Current portion of lease liabilities | 185 | 268 |
| Current portion of contract liabilities | 64 | 48 |
| Other | 107 | 114 |
| Total Current Liabilities | 51,299 | 56,263 |
| Non-current Liabilities | ||
| SBA loans | 761 | 875 |
| Lease liabilities | 40 | 118 |
| Contract liabilities | 295 | 293 |
| Deferred tax liability | 28 | 28 |
| Total Non-current Liabilities | 1,124 | 1,314 |
| Total Liabilities | 52,423 | 57,577 |
| Commitments and Contingencies (Footnote 11) | ||
| STOCKHOLDERS' DEFICIT | ||
| Preferred Stock, par value $0.001, 5,000,000 shares authorized; 6,175, 293, 90 and 8 shares designated Series A, Series B, Series C and Series D, respectively; no shares issued and outstanding at June 30, 2022 and December 31, 2021 | 0 | 0 |
| Common Stock, par value $0.001, 800,000,000 shares authorized; 529,293,205 and 481,619,621 issued and outstanding at June 30, 2022 December 31, 2021, respectively | 529 | 482 |
| Additional Paid-in Capital | 151,409 | 144,582 |
| Accumulated Deficit | -185,671 | -183,949 |
| Accumulated Other Comprehensive Loss | -67 | -73 |
| Total Stockholders' Deficit | -33,800 | -38,958 |
| Total Liabilities and Stockholders' Deficit | $ 18,623 | $ 18,619 |
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
| Jun. 30, 2022 | Jun. 30, 2021 | |
| Cash Flows - Operating Activities: | ||
| Net income (loss) | $ (1,722) | $ (13,552) |
| Adjustments to reconcile net loss to net cash used by operating activities | ||
| Amortization of intangibles | 352 | 352 |
| Depreciation | 94 | 198 |
| Bad debt expense | 52 | 240 |
| Income tax expense | 0 | 22 |
| Shares issued for services | 888 | 0 |
| Loss on extinguishment of debt | 211 | 0 |
| Gain on sale of property and equipment, net | -541 | 0 |
| Change in fair value of derivative liabilities | -11,343 | -44 |
| Loss on issuance of debt | 3,434 | 2,484 |
| Amortization of debt issuance costs and original issue discount | 1,304 | 719 |
| Accrued interest | 1,078 | 390 |
| Interest payable, related parties | 112 | 95 |
| Changes in operating assets and liabilities | ||
| Accounts receivable - trade | 733 | 218 |
| Inventory | 115 | 521 |
| Prepaid expenses | -855 | -191 |
| Other assets | 47 | -83 |
| Accounts payable | -562 | 1,475 |
| Accrued expenses | 1,407 | 1,350 |
| Accrued employee compensation | 103 | 553 |
| Contract liabilities | -108 | 4 |
| Net Cash Used by Operating Activities | -5,201 | -5,249 |
| Cash Flows - Investing Activities | ||
| Proceeds from sale of property and equipment | 948 | 0 |
| Purchase of property and equipment | 0 | -277 |
| Net Cash Flows Used in Investing Activities | 948 | -277 |
| Cash Flows - Financing Activities | ||
| Proceeds from senior promissory notes | 2,940 | 1,263 |
| Proceeds from short term notes | 2,130 | 1,033 |
| Proceeds from factoring | 55 | 1,038 |
| Proceeds from warrant exercises | 100 | 0 |
| Payments of principal on finance leases | -121 | -94 |
| Proceeds from related party advances | 0 | 125 |
| Net Cash Flows Provided by Financing Activities | 5,104 | 3,365 |
| Effect of Exchange Rates on Cash | 14 | -12 |
| Net Change in Cash During Period | 865 | -2,173 |
| Cash at Beginning of Period | 619 | 2,437 |
| Cash at End of Period | 1,484 | 264 |
| Supplemental Information: | ||
| Cash paid for interest | 2,045 | 1,434 |
| Non-cash Investing and Financing Activities: | ||
| Reclassification of warrant liability due to cashless warrant exercise | 2,167 | 2,030 |
| Warrants issued in conjunction with senior secured promissory note payable | 2,654 | 0 |
| Common shares issued in conjunction with senior secured promissory note payable | 3,720 | 0 |
| Embedded conversion option with issuances of convertible debt | 0 | 2,740 |
| Warrant issuance in conjunction with convertible debt | $ 0 | $ 758 |
