EDEN PRARIE, MN, April 03, 2023 (GLOBE NEWSWIRE) -- via NewMediaWire -- SANUWAVE Health, Inc. (OTCQB: SNWV), a leading provider of next-generation FDA-approved wound care products, today reported financial results for the fourth quarter and full year ended December 31, 2022 and provided a corporate update.
"We are very pleased with the 2022 financial results and having achieved record annual revenues for the full year and record quarterly revenues in Q4 2022. We are managing through our supply chain challenges which remained a constraining factor in Q4 2022 and Q1 2023 and are now focusing on growing sales with increased product supply in 2023," stated Mr. Kevin Richardson, CEO. "It is also noteworthy that we continue to decrease our operating expenses with the goal of achieving sustainable profitable growth."
Recent Developments and Upcoming Events
- Several key additions to the Sanuwave team were made during Q1 2023.
- Tim Hendricks recently joined Sanuwave as the Executive Vice President of Sales. Tim has extensive experience in the wound care and medical device space with more than 20 years' experience in leadership, training and sales.
- Nanci Gilmore has joined Sanuwave as the Vice President of Commercial Operations. Nanci is a seasoned professional with extensive experience in start-ups along with clinical training, operations and other sales support leadership functions.
- Matt Igtanloc has joined Sanuwave as the Vice President of Operations. Matt has 18 years of strong experience in manufacturing, operations and processes, including in the medical device industry.
- Sanuwave common stock commenced trading on the OTCQB on January 30, 2023 under ticker symbol "SNWV".
- The Company plans to attend the following conferences:
- THE THIRD ANNUAL LEADERS IN WOUND HEALING CONFERENCE - 4/18 & 4/19, New Orleans,
- SAWC SPRING - 4/26-30, National Harbor, MD,
- EWMA 2023 SYMPOSIUM - 5/5, Milan, Italy.
Financial Highlights for Fourth Quarter 2022
- Revenues increased by 32% to $5.5 million for the fourth quarter ended December 31, 2022, versus $4.2 million for the third quarter ending September 30, 2022.
- Gross margin improved to 78% of revenue in the fourth quarter ended December 31, 2022 from 72% in the third quarter ended September 30, 2022 and 69% in the fourth quarter ended December 31, 2021.
- Operating loss under GAAP continued to improve in the fourth quarter ended December 31, 2022, reaching ($1.5 million) versus ($2.5 million) in the third quarter ending on September 30, 2022.
Financial Highlights for the Full Year of 2022
- Revenues increased by 29% to $16.7 million for the year ended December 31, 2022, versus $13.0 million for the year ended December 31, 2021.
- Gross margin also improved year over year to 74% from 62% in the prior year.
- As the company focuses on profitable growth, operating loss continued to decrease from the prior year. Operating loss for the year ended December 31, 2022 totaled $9.0 million as compared to $14.1 million in the prior year.
- Operating expense for the year ended December 31, 2022 totaled $21.4 million, a decrease of 4% over the prior year.
Guidance
The Company has continued to be significantly supply constrained during Q1 2023, typically the slowest quarter of the year. Despite this, we anticipate revenue growth of approximately 14 to 20% during this quarter compared to Q1 2022, ended March 31, 2022. The company believes that supply constraint has been meaningfully alleviated and that Q2 2023 should see further increase in revenue growth.
As previously announced a business update will occur via conference call on April 3, 2023. Materials for the conference call at 9:00 a.m. EST are included on the company website, www.sanuwave.com/investors.
Telephone access to the call will be available by dialing the following numbers:
Participant Listening: 1-877-407-0784 or 1-201-689-8560
OR click the Call me link for instant telephone access to the event.
Call me:
https://callme.viavid.com/viavid/?callme=true&passcode=13732361&h=true&info=company&r=true&B=6
A replay will be made available through April 17, 2023:
Toll-Free: 1-844-512-2921 or 1-412-317-6671
Replay Access ID: 13737646
Restatement of Previously Issued Financial Statements
The Company determined, during the preparation of this Annual Report on Form 10-K for the year ended December 31, 2022 that it had not appropriately accounted for certain transactions under GAAP. These transactions included shares issued for services and the sale of assets under a financing agreement. Also, during the preparation of this Annual Report on Form 10-K for the year ended December 31, 2022 and the implementation of internal controls over financial reporting, it was discovered that certain vendor invoices were not properly recorded in prior periods, interest was not properly calculated on senior debt and an inventory adjustment was posted improperly. The Company evaluated the materiality of the errors from qualitative and quantitative perspectives, individually and in aggregate, and concluded that the errors in aggregate were material to the Consolidated Statements of Comprehensive Loss for the quarters ending March 31, 2022, June 30, 2022, and September 30, 2022. Management restated the impacted financial statements for the quarters ended March 31, 2022, the quarter and six-months ending June 30, 2022, and the quarter and nine-months ending September 30, 2022.
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 the 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 annual and 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 | ||||||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||||||
| December 31, 2022 and 2021 | ||||||||||||||
| (In thousands, except share data) | 2022 | 2021 | ||||||||||||
| ASSETS | ||||||||||||||
| Current Assets: | ||||||||||||||
| Cash | $ | 1,153 | $ | 619 | ||||||||||
| Accounts receivable, net of allowance of $1,037 in 2022 and $785 in 2021 | 4,029 | 2,415 | ||||||||||||
| Inventory | 868 | 1,040 | ||||||||||||
| Prepaid expenses and other current assets | 570 | 326 | ||||||||||||
| Total Current Assets | 6,620 | 4,400 | ||||||||||||
| Non-Current Assets: | ||||||||||||||
| Property, equipment and right of use assets, net | 750 | 1,012 | ||||||||||||
| Intangible assets, net | 5,137 | 5,841 | ||||||||||||
| Goodwill | 7,260 | 7,260 | ||||||||||||
| Other assets | 106 | 106 | ||||||||||||
| Total Non-Current Assets | 13,253 | 14,219 | ||||||||||||
| Total Assets | $ | 19,873 | $ | 18,619 | ||||||||||
| LIABILITIES | ||||||||||||||
| Current Liabilities: | ||||||||||||||
| Senior secured debt, in default | $ | 14,416 | $ | 11,586 | ||||||||||
| Convertible promissory notes | 16,713 | 11,601 | ||||||||||||
| Convertible promissory note, related parties | 7,409 | 1,596 | ||||||||||||
| Factoring liabilities | 2,130 | 2,183 | ||||||||||||
| Accounts payable | 4,400 | 7,644 | ||||||||||||
| Accrued expenses | 8,512 | 8,641 | ||||||||||||
| Warrant liability | 1,416 | 9,614 | ||||||||||||
| Current portion of SBA loans | - | 158 | ||||||||||||
| Accrued interest | 4,052 | 2,521 | ||||||||||||
| Accrued interest, related parties | 788 | 289 | ||||||||||||
| Current portion of contract liabilities | 60 | 48 | ||||||||||||
| Other | 291 | 382 | ||||||||||||
| Total Current Liabilities | 60,187 | 56,263 | ||||||||||||
| Non-Current Liabilities: | ||||||||||||||
| SBA loans | - | 875 | ||||||||||||
| Contract liabities | 230 | 293 | ||||||||||||
| Lease liabilities | 438 | 118 | ||||||||||||
| Deferred tax liability | 28 | 28 | ||||||||||||
| Total Non-Current Liablities | 696 | 1,314 | ||||||||||||
| Total Liabilites | $ | 60,883 | $ | 57,577 | ||||||||||
| Commitments and Contingencies (Footnote 21) | ||||||||||||||
| STOCKHOLDERS' DEFICIT | ||||||||||||||
| Preferred stock, par value $0.001, 5,000,000 shares authorized, 6,175 Series A, 293 Series B, 90 Series C, and 8 Series D designated shares, respectively; no shares issues and outstanding at 2022 and 2021 | $ | - | $ | - | ||||||||||
| Common stock, par value $0.001, 800,000,000 shares authorized, 548,737,651 and 481,619,621 issued and outstanding at 2022 and 2021, respectively | 549 | 482 | ||||||||||||
| Additional paid-in capital | 152,750 | 144,582 | ||||||||||||
| Accumulated deficit | (194,242 | ) | (183,949 | ) | ||||||||||
| Accumulated other comprehensive loss | (67 | ) | (73 | ) | ||||||||||
| Total Stockholders' Deficit | (41,010 | ) | (38,958 | ) | ||||||||||
| Total Liabilities and Stockholders' Deficit | $ | 19,873 | $ | 18,619 | ||||||||||
| The accompanying notes to consolidated financial statements are an integral part of these statements. | ||||||||||||||
| SAUWAVE HEALTH, INC. AND SUBSIDIARIES | |||||||||||
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | |||||||||||
| Years ended December 31, 2022 and 2021 | |||||||||||
| (In thousands, except share and per share data) | 2022 | 2021 | |||||||||
| Revenue | $ | 16,742 | $ | 13,010 | |||||||
| Cost of revenues | 4,331 | 4,986 | |||||||||
| Gross Margin | 12,411 | 8,024 | |||||||||
| Operating Expenses: | |||||||||||
| General and administrative | 12,556 | 11,690 | |||||||||
| Selling and marketing | 7,474 | 8,591 | |||||||||
| Research and development | 567 | 1,101 | |||||||||
| Depreciation and amortization | 766 | 784 | |||||||||
| Total Operating Expenses | 21,363 | 22,166 | |||||||||
| Operating Loss | (8,952 | ) | (14,142 | ) | |||||||
| Other Income (Expense) | |||||||||||
| Interest expense | (12,771 | ) | (6,883 | ) | |||||||
| Interest expense, related party | (1,361 | ) | (212 | ) | |||||||
| Change in fair value of derivative liabilities | 16,654 | (2,622 | ) | ||||||||
| Loss on issuance of debt | (3,434 | ) | (3,572 | ) | |||||||
| Gain/(loss) on extinguishment of debt | (418 | ) | 204 | ||||||||
| Loss on foreign currency exchange | (9 | ) | (4 | ) | |||||||
| Total Other Expense | (1,339 | ) | (13,089 | ) | |||||||
| Net Loss Before Income Taxes | (10,291 | ) | (27,231 | ) | |||||||
| Income tax expense | 2 | 28 | |||||||||
| Net Loss | $ | (10,293 | ) | $ | (27,259 | ) | |||||
| Other Comprehensive Loss | |||||||||||
| Foreign currency translation adjustments | 6 | (11 | ) | ||||||||
| Total Comprehensive Loss | $ | (10,287 | ) | $ | (27,270 | ) | |||||
| Loss per Share: | |||||||||||
| Net loss per share, basic and diluted | $ | (0.02 | ) | $ | (0.05 | ) | |||||
| Weighted average shares outstanding, basic and diluted | 549,470,787 | 518,355,642 | |||||||||
| The accompanying ntoes to consolidated financial statements are an integral part of these statements. | |||||||||||
| SANUWAVE HEALTH, INC. AND SUBSIDIARIES | |||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT | |||||||||||||||||||||
| (In thousands, except share data) | |||||||||||||||||||||
| Common Stock | |||||||||||||||||||||
| Shares Issued and Outstanding | Par Value | Additional Paid- in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total | ||||||||||||||||
| Balances as of December 31, 2020 | 470,694,621 | $ | 471 | $ | 142,563 | $ | (156,690 | ) | $ | (62 | ) | $ | (13,718) | ||||||||
| Cashless warrant exercise | 10,925,000 | 11 | (11 | ) | - | - | - | ||||||||||||||
| Reclassification of warrant liability due to cashless warrant exercise | - | - | 2,030 | - | - | 2,030 | |||||||||||||||
| Net loss | - | - | - | (27,259 | ) | - | (27,259) | ||||||||||||||
| Foreign currency translation adjustment | - | - | - | - | (11 | ) | (11) | ||||||||||||||
| 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 senior note | 20,666,993 | 20 | 3,700 | - | - | 3,720 | |||||||||||||||
| Shares issued for settlement of debt and warrants | 19,444,446 | 20 | 1,341 | - | - | 1,361 | |||||||||||||||
| Shares issued for services | 12,097,500 | 12 | 876 | - | - | 888 | |||||||||||||||
| Net loss | - | - | - | (10,293 | ) | - | (10,293) | ||||||||||||||
| Foreign currency translation adjustment | - | - | - | - | 6 | 6 | |||||||||||||||
| Balance as of December 31, 2022 | 548,737,651 | $ | 549 | $ | 152,750 | $ | (194,242 | ) | $ | (67 | ) | $ | (41,010) | ||||||||
| The accompanying notes to the consolidated financial statements are an integral part of these financial statements | |||||||||||||||||||||
| SANUWAVE HEALTH, INC. AND SUBSIDIARIES | ||||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||
| Years ended December 31, 2022 and 2021 | ||||||||||||||
| (In thousands) | 2022 | 2021 | ||||||||||||
| Cash Flows - Operating Activities: | ||||||||||||||
| Net loss | $ | (10,293 | ) | $ | (27,259 | ) | ||||||||
| Adjustments to reconcile net loss to net cash used by operating activities | ||||||||||||||
| Depreciation and amortization | 952 | 1,236 | ||||||||||||
| Bad debt expense | 253 | 442 | ||||||||||||
| Shares issued for services | 888 | - | ||||||||||||
| Gain/loss on extinguishment of debt | 418 | (204 | ) | |||||||||||
| Income tax expense | 2 | 28 | ||||||||||||
| Change in fair value of derivative liabilites | (16,654 | ) | 2,622 | |||||||||||
| Loss on issuance of debt | 3,434 | 3,572 | ||||||||||||
| Amortization of debt issuance and debt discounts | 4,950 | 3,226 | ||||||||||||
| Changes in operating assets and liablities: | ||||||||||||||
| Accounts receivable | (1,748 | ) | (395 | ) | ||||||||||
| Inventory, prepaid expenses and other assets | (72 | ) | 1,687 | |||||||||||
| Accounts payable | (2,550 | ) | 3,181 | |||||||||||
| Accrued interest and accrued interest, related parties | 3,182 | 1,718 | ||||||||||||
| Accrued expenses and contract liabilities | 69 | 3,737 | ||||||||||||
| Net Cash Used by Operating Activities | (17,169 | ) | (6,409 | ) | ||||||||||
| Cash Flows - Investing Activites | ||||||||||||||
| Purchase (proceeds from sale) of property and equipment | 332 | (529 | ) | |||||||||||
| Net Cash Flows Used by Investing Activities | 332 | (529 | ) | |||||||||||
| Cash Flows - Financing Activities | ||||||||||||||
| Proceeds from convertible promisorry notes | 16,227 | 1,928 | ||||||||||||
| Proceeds from SBA loans | - | 1,033 | ||||||||||||
| Proceeds from senior secured promissory note | 2,940 | 940 | ||||||||||||
| Proceeds from factoring | 695 | 1,737 | ||||||||||||
| Proceeds from warrant exercises | 100 | - | ||||||||||||
| Proceeds from short term borrowings | 640 | 175 | ||||||||||||
| Repayments of debt principal | (2,981 | ) | (493 | ) | ||||||||||
| Principal payments on finance leases | (237 | ) | (199 | ) | ||||||||||
| Net Cash Flows Provided by Financing Activities | 17,384 | 5,121 | ||||||||||||
| Effect of Exchange Rates on Cash | (13 | ) | (1 | ) | ||||||||||
| Net Change in Cash During Period | 534 | (1,818 | ) | |||||||||||
| Cash at Beginning of Period | 619 | 2,437 | ||||||||||||
| Cash at End of Period | $ | 1,153 | $ | 619 | ||||||||||
| Supplemental Information: | ||||||||||||||
| Cash paid for interest | $ | 3,712 | $ | 2,580 | ||||||||||
| Non-Cash Investing and Financing Activities: | ||||||||||||||
| Reclassification of warrant liabilities to equity due to cashless warrant exercise | $ | 2,166 | $ | 2,030 | ||||||||||
| Settlement of debt and warrants with stock | 1,361 | - | ||||||||||||
| Working capital balances refinanced into convertible promissory notes | 2,363 | - | ||||||||||||
| Embedded conversion feature on convertible debt | 2,760 | 4,138 | ||||||||||||
| Common shares issued in conjunction with senior secured debt | 3,720 | - | ||||||||||||
| Warrant issuance in conjunction with advances on future cash receipts | - | 1,227 | ||||||||||||
| Warrant issuance in conjunction with convertible notes | 1,708 | 1,055 | ||||||||||||
| The accompanying notes to consolidated financial statemetns are an integral part of these statements. | ||||||||||||||
