SANUWAVE Health Inc.

08/15/2022 | Press release | Distributed by Public on 08/15/2022 16:15

August 15, 2022: SANUWAVE Health Reports Q2 Financial Results & Will Host Live Conference Call With Business Update

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

[email protected]

INVESTOR RELATIONS CONTACT:

Kevin Richardson II
Chief Executive Officer
[email protected]

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