SANUWAVE Announces Q3 Earnings
EDEN PRAIRIE, MN, Nov. 14, 2022 (GLOBE NEWSWIRE) — via NewMediaWire – SANUWAVE Health, Inc. (OTCPK: SNWV), a leading provider of next-generation FDA-approved wound care products, today announced 3rd quarter results.
For the three-months and nine-months ended September 30, 2022:
- Revenues increased 12% to $4.2 million for the 3 months ended September 30, 2022, versus $3.7 million for the same period last year.
- Revenue for the nine-months ended September 30, 2022, totaled approximately $11.2 million versus $8.7 million for the same period in the prior year, an increase of 28.5%.
- Gross margin also improved period over period to 85% from 58% a year ago and to 77% versus 58% for the nine-months ended September 30, 2022.
- Operating loss continued to decrease from the prior year. Operating loss for the three-months ended September 30, 2022, totaled $1.8 million as compared to the prior year at $3.4 million. Operating expense for the nine-months ended September 30, 2022, totaled $13.9 million, a decrease of 17.6% over the same period in the prior year.
Mr. Kevin Richardson, CEO, stated, “We are very pleased with third quarter results which showed revenue growth year on year despite ongoing capacity constraints. Our focus is increasing sales at an accelerated rate as we ramp up capacity during the fourth quarter and into 2023. We have also decreased our operating expenses over the past year to a level where we can achieve profitable growth.”
“As a result of our efforts to improve profitability and manage our expenses, the company is pleased to announce that it became EBITDA positive in the month of October and expects to continue this for Q4 as a whole.”
Subsequent to the end of the quarter, the company raised an additional approximately $2 million in order to maximize flexibility around sales hiring and inventory build. Terms were consistent with the August financing. This cash is not reflected in the Q3 statements
As previously announced a business update will occur via conference call on November 15, 2022. Materials for the conference call at 9:00 a.m. EST are included on the company website, www.sanuwave.com/investors.
Telephone access is available by dialing the following numbers:
Conference ID: 13734492
Toll-Free: 1-877-407-0784
Toll/International: 1-201-689-8560
A replay will be available through November 29, 2022, shortly after conclusion of the event.
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 end-to-end wound care portfolio 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.
CONTACT:
Kevin Richardson, II
Chief Executive Officer
Investors@Sanuwave.com
| SANUWAVE HEALTH, INC. AND SUBSIDIARIES | ||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||
| (UNAUDITED) | ||||||||||
| (In thousands) | ||||||||||
| Nine Months Ended September 30, | ||||||||||
| 2022 | 2021 | |||||||||
| Cash Flows – Operating Acivities: | ||||||||||
| Net loss | $ | (2,135 | ) | $ | (17,804 | ) | ||||
| Adjustments to reconcile net loss to net cash used by operating activities | ||||||||||
| Depreciation and Amortization | 681 | 970 | ||||||||
| Bad debt expense | 62 | 307 | ||||||||
| Income tax expense | – | 28 | ||||||||
| Shares issued for service | 888 | – | ||||||||
| Loss (Gain) on extinguishment of debt | 297 | (460 | ) | |||||||
| Gain on sale of property and equipment, net | (690 | ) | – | |||||||
| Change in fair value of derivative liabilities | (16,597 | ) | (1,599 | ) | ||||||
| Loss on issuance of debt | 3,434 | 3,572 | ||||||||
| Amortization of debt issuance costs and original issue discount | 2,998 | 1,418 | ||||||||
| Accrued interest | 1,618 | 929 | ||||||||
| Interest payable, related parties | 168 | 150 | ||||||||
| Changes in operating assets and liabilities | ||||||||||
| Accounts receivable – trade | 69 | (345 | ) | |||||||
| Inventory | (373 | ) | 1,430 | |||||||
| Prepaid expenses and other assets | (1,437 | ) | (355 | ) | ||||||
| Accounts payable | (1,863 | ) | 2,656 | |||||||
| Accrued expenses | 271 | 1,652 | ||||||||
| Accrued employee compensation | (473 | ) | 885 | |||||||
| Contract liabilties | (94 | ) | 60 | |||||||
| Net Cash Used in Operating Activities | (13,176 | ) | (6,506 | ) | ||||||
| Cash Flows – Investing Activities | ||||||||||
| Proceeds from sale of property and equipment | 1,022 | – | ||||||||
| Purchase of property and equipment | – | (441 | ) | |||||||
| Net Cash Flows Provided by (Used in) Investing Activities | 1,022 | (441 | ) | |||||||
| Cash Flows – Financing Activities | ||||||||||
| Proceeds from senior promissory notes | 2,940 | 940 | ||||||||
| Proceeds from short term notes | 640 | 125 | ||||||||
| Proceeds from factoring, net | (227 | ) | 1,244 | |||||||
| Proceeds from SBA loan | – | 1,033 | ||||||||
| Proceeds from warrant exercises | 100 | – | ||||||||
| Proceeds from convertible promissory notes | 12,366 | 1,928 | ||||||||
| Payments of principal on finance leases | (174 | ) | (143 | ) | ||||||
| Payments of principal on convertible promissory notes, related parties, convertible promissory notes and SBA loans | (2,981 | ) | (237 | ) | ||||||
| Net Cash Flows Provided by Financing Activities | 12,664 | 4,890 | ||||||||
| Effect of Exchange Rates on Cash | (17 | ) | (53 | ) | ||||||
| Net Change in Cash During Period | 493 | (2,110 | ) | |||||||
| Cash at Beginning of Period | 619 | 2,437 | ||||||||
| Cash at End of Period | $ | 1,112 | $ | 327 | ||||||
| Supplemental Information: | ||||||||||
| Cash paid for interest | $ | 3,345 | $ | 1,993 | ||||||
| Non-cash Investing and Financing Activities: | ||||||||||
| Reclassification of warrant liability due to cashless warrant exercise | $ | 2,166 | $ | 2,030 | ||||||
| Settlement of debt and warrants with stock | 1,361 | $ | – | |||||||
| Warrants issued in conjunction with senior secured promissory note payable | 2,654 | – | ||||||||
| Common shares issued in conjunction with senior secured promissory note payable | 3,720 | – | ||||||||
| Embedded conversion option with issuances of convertible debt | 2,309 | 2,740 | ||||||||
| Working capital balances refinanced into Convertible notes payable | 2,273 | – | ||||||||
| Warrant issuance in conjunction with convertible debt | 1,463 | 758 | ||||||||
| The accompanying notes to condensed consolidated financial statements are an integral part of these financial statements. | ||||||||||
| SANUWAVE HEALTH, INC. AND SUBSIDIARIES | |||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | |||||||||||||||||||
| (UNAUDITED) | |||||||||||||||||||
| (In thousands, except share data) | |||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||
| Revenues: | |||||||||||||||||||
| Accessory and parts revenue | $ | 3,012 | $ | 2,067 | $ | 7,866 | $ | 5,645 | |||||||||||
| Product | 902 | 1,299 | 2,408 | 2,066 | |||||||||||||||
| Rental Income | 247 | 333 | 935 | 864 | |||||||||||||||
| License fees and other | 5 | 26 | 33 | 175 | |||||||||||||||
| Total Revenue | 4,166 | 3,725 | 11,242 | 8,750 | |||||||||||||||
| Cost of Revenues | 606 | 1,555 | 2,590 | 3,658 | |||||||||||||||
| Gross Margin | 3,560 | 2,170 | 8,652 | 5,092 | |||||||||||||||
| Operating Expenses: | |||||||||||||||||||
| General and administrative | 8,482 | 2,864 | 8,482 | 8,909 | |||||||||||||||
| Selling and marketing | 5,037 | 2,150 | 5,037 | 6,450 | |||||||||||||||
| Research and development | 494 | 297 | 494 | 923 | |||||||||||||||
| Gain on disposal of assets | (690 | ) | – | (690 | ) | – | |||||||||||||
| Depreciation and amortization | 575 | 194 | 575 | 585 | |||||||||||||||
| Total Operating Expenses | 13,898 | 5,505 | 13,898 | 16,867 | |||||||||||||||
| Operating Loss | (10,338 | ) | (3,335 | ) | (5,246 | ) | (11,775 | ) | |||||||||||
| Other Income (Expense): | |||||||||||||||||||
| Interest expense | (3,301 | ) | (1,781 | ) | (9,203 | ) | (4,340 | ) | |||||||||||
| Interest expense, related party | (439 | ) | (55 | ) | (551 | ) | (150 | ) | |||||||||||
| Change in fair value of derivative liabilities | 5,252 | 1,555 | 16,597 | 1,599 | |||||||||||||||
| Loss on issuance of debt | – | (1,088 | ) | (3,434 | ) | (3,572 | ) | ||||||||||||
| Gain / (loss) on extinguishment of debt | (86 | ) | 460 | (297 | ) | 460 | |||||||||||||
| Gain / (loss) on foreign currency exchange | 1 | (2 | ) | (1 | ) | 2 | |||||||||||||
| Other Income (Expense), net | 1,427 | (911 | ) | 3,111 | (6,001 | ) | |||||||||||||
| Net Loss before Income Taxes | (8,911 | ) | (4,246 | ) | (2,135 | ) | (17,776 | ) | |||||||||||
| Provision for Income Taxes | – | 6 | – | 28 | |||||||||||||||
| Net Loss | (8,911 | ) | (4,252 | ) | (2,135 | ) | (17,804 | ) | |||||||||||
| Other Comprehensive Loss | |||||||||||||||||||
| Foreign currency translation adjustments | – | – | – | (12 | ) | ||||||||||||||
| Total Comprehensive Loss | $ | (8,911 | ) | $ | (4,252 | ) | $ | (2,135 | ) | $ | (17,816 | ) | |||||||
| Loss per Share: | |||||||||||||||||||
| Basic and Diluted | $ | (0.02 | ) | $ | (0.01 | ) | $ | (0.00 | ) | $ | (0.03 | ) | |||||||
| Weighted average shares outstanding, basic and diluted | |||||||||||||||||||
| Basic and Diluted | 561,069,625 | 518,310,781 | 542,484,779 | 518,370,156 | |||||||||||||||
| The accompanying notes to condensed consolidated financial | |||||||||||||||||||
| statements are an integral part of these financial statements. | |||||||||||||||||||
| SANUWAVE HEALTH, INC. AND SUBSIDIARIES | |||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||||
| (UNAUDITED) | |||||||||||
| (In thousands, except share data) | |||||||||||
| September 30, 2022 | December 31, 2021 | ||||||||||
| ASSETS | |||||||||||
| Current Assets: | |||||||||||
| Cash | $ | 1,112 | $ | 619 | |||||||
| Accounts receivable, net of allowance for doubtful accounts of $0.8 million, respectively | 2,403 | 2,415 | |||||||||
| Inventory | 1,413 | 1,040 | |||||||||
| Prepaid expenses and other current assets | 1,935 | 326 | |||||||||
| Total Current Assets | 6,863 | 4,400 | |||||||||
| Property, Equipment and Other, net | 673 | 1,118 | |||||||||
| Other Intangible Assets, net | 5,313 | 5,841 | |||||||||
| Goodwill | 7,260 | 7,260 | |||||||||
| Total Assets | $ | 20,109 | $ | 18,619 | |||||||
| LIABILITIES | |||||||||||
| Current Liabilities: | |||||||||||
| Senior secured promissory note payable, in default | $ | 12,773 | $ | 11,586 | |||||||
| Convertible promissory notes payable, in default | 4,000 | 11,601 | |||||||||
| Convertible promissory notes, related parties, in default | 1,373 | 1,596 | |||||||||
| Convertible promissory notes payable | 9,174 | – | |||||||||
| Convertible promissory notes payable, related parties | 4,485 | – | |||||||||
| Advances on future cash receipts | 194 | 446 | |||||||||
| Accounts payable | 5,055 | 7,644 | |||||||||
| Accrued expenses | 4,100 | 4,394 | |||||||||
| Accrued employee compensation | 3,792 | 4,247 | |||||||||
| Due under factoring ageement | 1,510 | 1,737 | |||||||||
| Warrant liability | 1,196 | 9,614 | |||||||||
| Current portion of SBA loans | – | 158 | |||||||||
| Accrued interest | 3,988 | 2,521 | |||||||||
| Accrued interest, related parties | 546 | 289 | |||||||||
| Current portion of lease and contract liabilities | 249 | 316 | |||||||||
| Other | 30 | 114 | |||||||||
| Total Current Liabilities | 52,465 | 56,263 | |||||||||
| Non-current Liabilities | |||||||||||
| SBA loans | – | 875 | |||||||||
| Lease liabilities | 263 | 118 | |||||||||
| Contract liabilities | 205 | 293 | |||||||||
| Deferred tax liability | 28 | 28 | |||||||||
| Total Non-currrent Liabilities | 496 | 1,314 | |||||||||
| Total Liabilities | 52,961 | 57,577 | |||||||||
| Commitments and Contingencies (Footnote 11) | |||||||||||
| STOCKHOLDERS’ DEFICIT | |||||||||||
| Preferred Stock, par value $0.001, 5,000,000 shares authorized; | |||||||||||
| 6,175 shares Series A, 293 shares Series B, 90 shares Series C and 8 shares Series D | – | – | |||||||||
| no shares issued and outstanding at September 30, 2022 and December 31, 2021 | |||||||||||
| Common Stock, par value $0.001, 800,000,000 shares authorized; 548,737,651 and 481,619,621 | |||||||||||
| issued and outstanding at September 30, 2022 December 31, 2021, respectively | 549 | 482 | |||||||||
| Additional Paid-in Capital | 152,750 | 144,582 | |||||||||
| Accumulated Deficit | (186,084 | ) | (183,949 | ) | |||||||
| Accumulated Other Comprehensive Loss | (67 | ) | (73 | ) | |||||||
| Total Stockholders’ Deficit | (32,852 | ) | (38,958 | ) | |||||||
| Total Liabilities and Stockholders’ Deficit | $ | 20,109 | $ | 18,619 | |||||||
| The accompanying notes to condensed consolidated financial statement are an integral part of these financial statements. | |||||||||||
