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SANUWAVE Announces Q1 2023 Financial Results

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EDEN PRAIRIE, MN – (NewMediaWire) – May 12, 2023 – SANUWAVE Health, Inc. (OTCQB: SNWV), a leading provider of next-generation FDA-approved wound care products, today announced 1st quarter 2023 results.

For the three-months ended March 31, 2023:

  • Revenues increased 18% to $3.8 million for Q1 2023 versus $3.2 million for the same period last year. This growth falls within the guidance range of 14-20%, provided on the prior conference call.
  • UltraMist® systems sold increased 12% to 28 for Q1 2023, versus 25 systems for the same period last year.
  • UltraMist® applicator cases sold increased 18% to 3,641, versus 3,093 applicator cases for the same period last year.
  • Gross margin as a percentage of revenue decreased for the three months ended March 31, 2023, to 67% from 72% for the same period last year.
  • Operating loss totaled $2.0 million for the three months ended March 31, 2023, which was flat compared to the same period last year.
  • We anticipate second quarter revenue growth to fall within a range of 15-25%.

Mr. Kevin Richardson, CEO, stated, “We are very pleased with the strong interest we observed from customers at the three conferences we attended.  The Third Annual Leaders in Wound Healing Conference in New Orleans, the Symposium on Advanced Wood Care Spring (SAWC Spring) in National Harbor, MD, and EWMA 2023 Symposium in Milan, Italy.  These conferences were an ideal platform for us to showcase our innovative non-invasive, regenerative medicine solutions for the treatment of chronic wounds.

 

SANUWAVE Health is committed to advancing the field of regenerative medicine and improving patient care. The company’s groundbreaking technology has been shown to accelerate the healing of chronic wounds, leading to improved patient outcomes and reduced healthcare costs.”

 

Subsequent to the end of the quarter, the company raised an additional approximately $1.2 million in order to maximize flexibility around sales hiring and inventory build.  Terms were consistent with the previous financing. This cash is not reflected in the Q1 statements.

Guidance

The Company has continued to have constrained inventory supply during Q1 2023. Despite this, we anticipate revenue growth of approximately 15% to 25% during Q2 2023, compared to Q2 2022. The company believes that supply is further improving and that we will observe continued increase in revenue growth in Q2 2023.

As previously announced a business update will occur via conference call on May 12, 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: 13738852

Toll-Free: 1-877-407-0784

Toll/International: 1-201-689-8560

A replay will be available through May 26, 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

PART I — FINANCIAL INFORMATION
               
ITEM 1. FINANCIAL STATEMENTS          
               
    SANUWAVE HEALTH, INC. AND SUBSIDIARIES
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (UNAUDITED)
    (In thousands, except share data)
               
          March 31, 2023   December 31, 2022
ASSETS
Current Assets:          
  Cash       $ 106     $ 1,153  
  Accounts receivable, net of allowance of $1.2 and $1.0 million, respectively       2,969       4,029  
  Inventory       1,071       868  
  Prepaid expenses and other current assets       371       570  
Total Current Assets       4,517       6,620  
  Property, Equipment and Other, net       758       856  
  Intangible Assets, net       4,962       5,137  
  Goodwill       7,260       7,260  
Total Non-current Assets       12,980       13,253  
Total Assets       $ 17,497     $ 19,873  
               
LIABILITIES
Current Liabilities:          
  Senior secured debt, in default     $ 14,996     $ 14,416  
  Convertible promissory notes payable       16,953       16,713  
  Convertible promissory notes payable, related parties       7,614       7,409  
  Accounts payable       5,264       4,400  
  Accrued expenses       8,550       8,512  
  Due under factoring ageement       1,631       2,130  
  Warrant liability       9,264       1,416  
  Accrued interest       4,981       4,052  
  Accrued interest, related parties       1,081       788  
  Current portion of contract liabilities       62       60  
  Other         255       291  
Total Current Liabilities       70,651       60,187  
Non-current Liabilities          
  Lease liabilities       384       438  
  Contract liabilities       225       230  
  Deferred tax liability       28       28  
Total Non-currrent Liabilities       637       696  
Total Liabilities     $ 71,288     $ 60,883  
               
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 March 31, 2023 and December 31, 2022        
Common Stock, par value $0.001, 2,500,000,000 shares authorized; 555,637,651 and 548,737,651    
  issued and outstanding at March 31, 2023 December 31, 2022, respectively     556       549  
Additional Paid-in Capital       153,046       152,750  
Accumulated Deficit       (207,322 )     (194,242 )
Accumulated Other Comprehensive Loss       (71 )     (67 )
Total Stockholders’ Deficit       (53,791 )     (41,010 )
Total Liabilities and Stockholders’ Deficit     $ 17,497     $ 19,873  
               
The accompanying notes to condensed consolidated financial statement are an integral part of these financial statements.
SANUWAVE HEALTH, INC. AND SUBSIDIARIES  
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS  
(UNAUDITED)
(In thousands, except share data)
               
        Three Months Ended March 31,  
          2023       2022    
Revenue     $ 3,775     $ 3,195    
Cost of Revenues       1,262       889    
Gross Margin       2,513       2,306    
               
Operating Expenses:          
  General and administrative     2,759       2,205    
  Selling and marketing     1,412       1,715    
  Research and development     131       166    
  Depreciation and amortization     189       176    
Total Operating Expenses     4,491       4,262    
               
Operating Loss       (1,978 )     (1,956 )  
               
Other Income (Expense):          
  Interest expense     (3,512 )     (3,136 )  
  Interest expense, related party     (766 )     (56 )  
  Change in fair value of derivative liabilities     (6,797 )     3,482    
  Loss on issuance of debt           (3,434 )  
  Other expense       (27 )        
  Gain / (loss) on foreign currency exchange           (1 )  
Total Other Expense     (11,102 )     (3,145 )  
               
Net Loss before Income Taxes     (13,080 )     (5,101 )  
               
Provision for Income Taxes              
               
Net Loss       (13,080 )     (5,101 )  
               
Other Comprehensive Loss          
  Foreign currency translation adjustments     (4 )        
               
Total Comprehensive Loss   $ (13,084 )   $ (5,101 )  
               
Loss per Share:            
  Basic and Diluted   $ (0.02 )   $ (0.01 )  
Weighted average shares outstanding, basic and diluted     575,028,811       525,414,534    
               
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 STOCKHOLDERS’ DEFICIT
  (UNAUDITED)
  (In thousands, except share data)
                                   
Three Months Ended March 31, 2023
      Preferred Stock   Common Stock                
      Number of       Number of               Accumulated  
      Shares       Shares               Other    
      Issued and       Issued and       Additional Paid-   Accumulated Comprehensive
      Outstanding   Par Value   Outstanding   Par Value   in Capital   Deficit   Loss   Total
                                   
Balances as of December 31, 2022   $   548,737,651   $ 549   $ 152,750   $ (194,242 ) $ (67 )   $ (41,010 )
  Shares issued for services         6,900,000     7     296               303  
  Net loss                   (13,080 )           (13,080 )
  Foreign currency translation adjustment                         (4 )     (4 )
                                   
Balances as of March 31, 2023     $   555,637,651   $ 556   $ 153,046   $ (207,322 )   $ (71 )   $ (53,791 )
                                   
Three Months Ended March 31, 2022
      Preferred Stock   Common Stock                
      Number of       Number of               Accumulated  
      Shares       Shares               Other    
      Issued and       Issued and       Additional Paid-   Accumulated Comprehensive
      Outstanding   Par Value   Outstanding   Par Value   in Capital   Deficit   Loss   Total
                                   
Balances as of December 31, 2021   $   481,619,621   $ 482   $ 144,582   $ (183,949 ) $ (73 )   $ (38,958 )
  Cashless warrant exercise         14,000,000     14     2,152                 2,166  
  Warrant exercise         909,091     1     99                 100  
  Shares issued in conjunction with Note Payable         20,666,993     20     3,700                 3,720  
  Net loss                   (5,101 )           (5,101 )
  Foreign currency translation adjustment                         6       6  
                                   
Balances as of March 31, 2022     $   517,195,705   $ 517   $ 150,533   $ (189,050 )   $ (67 )   $ (38,067 )
                                   
  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 CASH FLOWS          
  (UNAUDITED)          
  (In thousands)          
             
        Three Months Ended March 31,
          2023     2022  
Cash Flows – Operating Acivities:          
Net loss       (13,080 )   (5,101 )
Adjustments to reconcile net loss to net cash used by operating activities          
  Depreciation and Amortization       259     191  
  Bad debt expense       156      –  
  Change in fair value of derivative liabilities       6,797     (3,482 )
  Loss on issuance of debt        –     3,434  
  Amortization of debt issuance costs and original issue discount       1,931     889  
  Accrued interest       1,365     667  
  Changes in operating assets and liabilities          
  Accounts receivable – trade       906     804  
  Inventory       (203 )   39  
  Prepaid expenses and other assets       195     4  
  Accounts payable       864     (866 )
  Accrued expenses       450     444  
  Contract liabilties       (11 )   (155 )
Net Cash Used in Operating Activities       (371 )   (3,132 )
             
Cash Flows – Investing Activities          
  Proceeds from sale of property and equipment        –     360  
  Purchase of property and equipment       (18 )    –  
Net Cash Flows Provided by (Used in) Investing Activities       (18 )   360  
             
Cash Flows – Financing Activities          
  Proceeds from senior promissory notes        –     2,940  
  Payments to factoring agent, net       (610 )   (505 )
  Proceeds from warrant exercises        –     100  
  Payments of principal on finance leases       (44 )   (65 )
Net Cash Flows Provided by Financing Activities       (654 )   2,470  
             
Effect of Exchange Rates on Cash       (4 )   (4 )
             
Net Change in Cash During Period       (1,047 )   (306 )
             
Cash at Beginning of Period       1,153     619  
Cash at End of Period       106     313  
             
Supplemental Information:          
  Cash paid for interest       908     574  
             
Non-cash Investing and Financing Activities:          
  Reclassification of warrant liability due to cashless warrant exercise     $  –     2,167  
  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  
  Common shares issued for advisory shares       302      –  
             
             
  The accompanying notes to condensed consolidated financial statements are an integral part of these financial statements.

 

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