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SANUWAVE Announces Q3 Earnings

EDEN PRAIRIE, MN - (NewMediaWire) - November 14, 2022 - 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.

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