SUWANEE, Ga., Aug. 15, 2019 (GLOBE NEWSWIRE) -- SANUWAVE Health, Inc. (OTCQB: SNWV) reported financial results for the three months ended June 30, 2019 with the SEC on Wednesday, August 14, 2019. The Company will also host a conference call today, August 15, 2019, 2019 at 9:00 a.m. Eastern Time.
Highlights from the second quarter and last few weeks:
- Placed 36 dermaPACE® Systems in the United States, exceeding expectation of 35 devices by end of second quarter. On track to reach 65 by end of third quarter and 110 by year end.
- NGS change in reimbursement status leads to adding 10 new states to the strategic growth plan. Accelerating placement plan by one full year.
- Presented abstracts, symposium, and posters at 5 conferences in second quarter
- Progress on completing two perfusion studies and one international Diabetic Foot Ulcer (DFU) treatment study.
- Two peer review articles published in Q2: “Focused shockwave therapy in diabetic foot ulcers: secondary endpoints of two multicentre randomized controlled trials” by Robert Galiano M.D, Robert Snyder, DPM, Perry Mayer MB, Oscar Alvarez PhD, Lee C. Rogers DPM in the June 2019 issue of the Journal of Wound Care and “Extended Extracorporeal Shockwave Therapy for Chronic Diabetic Foot Ulcers: A Case Series” by Wen-Yi Chou, MD, Ching-Jen Wang, MD, Jai-Hong Cheng, PhD, Jen-Hong Chen, MD, Chien-Chang Chen, MD and Yur-Ren Kuo, MD in the May 2019 issue of Wounds.
- Over 130 patients treated
- 116 clinicians certified to use and treat with dermaPACE System.
- Expecting initial procedural revenue in Q3.
“SANUWAVE’s focus during 2019 remains placing devices with qualified clinicians in fifteen target states. We recently added New York, Illinois, Massachusetts, Vermont, Rhode Island, New Hampshire, Maine, Connecticut, Minnesota, and Wisconsin to our targeted markets due to a change in reimbursement policy put forth by National Government Services (NGS). We exceeded our goal for placements in the second quarter and are on pace to achieve our goal for the third quarter. Second quarter revenue was lower due to $150,000 in license fees which occurred in 2018 which were not included in 2019 numbers. License fees tend to be one time in nature and lumpy and the timing is difficult to predict. Revenue growth is expected to accelerate dramatically later in the year as devices move from placement to revenue producing. We are being very deliberate and balanced on this initial roll out, and once we gain reimbursement coverage in specific markets, we will then accelerate growth in those geographies,” stated Kevin Richardson, CEO.
SANUWAVE President, Shri Parikh comments, “We are very encouraged by the success we are having with clinicians and patients. Over the past few busy traveling weeks I’ve had the pleasure to meet with many clinical and economic customers, as well as patients, and the response on the experience with our technology has been terrific. We are excited share many of these testimonials with you on our newly improved website in the near future. Once we achieve reimbursement standards in focused markets, our business model allows for a rapid expansion. The NGS announcement yesterday redirected our immediate attention on the northeast and Midwest markets. The team is focused on placing devices within this NGS market, helping to rapidly begin recognizing revenue. Our top focus remains appropriate customer placements for DFU treatments, which will lead to revenue growth as we exit 2019 and throughout 2020.”
Goals for 2019 and update on progress
- 110 dermaPACE system placements and 300 certified users -- 36 at end of Q2, 65 by Q3, and 110 by year end -- 116 certified users on track for over 300 by year end
- Finish with at least 10 million covered lives for insurance reimbursement -- NGS’s 7 million lives allows SANUWAVE to achieve this target
- Launch 2-3 domestic clinical studies. On track with 2 perfusion studies under way.
- Add 3-4 new countries. On track to exceed this goal.
- Add additional advisors to our scientific board. On track for additions in second half.
- Add other key senior management positions. Continuous process with success to date.
2019 sets the stage for SANUWAVE to shift from a clinical research company to a rapidly growing commercialization company. The process involves placing devices, training clinicians, gaining reimbursement, and supporting the infrastructure with more clinical research, published articles, and case studies. The method will allow SANUWAVE to achieve the goal of delivering a dermaPACE System anywhere and everywhere a DFU is treated. This allows SANUWAVE to accomplish the vision of providing a positive impact on life and the environment, one shock at a time.
Second Quarter Financial Results
Revenues for the three months ended June 30, 2019 were $316,976, compared to $453,210 for the same period in 2018, a decrease of $136,234, or 30%. Revenue resulted primarily from sales in Europe of our orthoPACE devices and related applicators and sales in the United States of our dermaPACE applicators. The decrease in revenue for 2019 is primarily due to a decrease in sales of new and refurbished applicators in Asia/Pacific and the European Community and lower upfront international distribution fees, as compared to the prior year. This is partially offset by higher device sales in the United States and Asia/Pacific.
Operating expenses for the three months ended June 30, 2019 were $2,150,610, compared to $2,408,314 for the same period in 2018, a decrease of $257,704, or 11%. Research and development expenses decreased by $21,480. The decrease was due to a reclassification of employees and related costs from research and development to general and administrative in 2019. This is partially offset by an increase in contracting for temporary services and increased study expenses related to our new dosage study in Poland. Selling and marketing expenses increased by $248,782. The increase was due to an increase in hiring of trainers and salespeople and increased travel expenses for placement and training related to the commercialization of dermaPACE. General and administrative expenses decreased by $485,283. The decrease was due to a decrease in stock based compensation expense related to options issued in 2018, lease expense related to pay-off of lease agreement for devices in 2018 and lower investor relations costs. This is partially offset by an increase in salary, bonus and benefits related to new hires in 2018.
Net loss for the three months ended June 30, 2019 was $2,734,431, or ($0.02) per basic and diluted share, compared to a net loss of $2,888,259, or ($0.02) per basic and diluted share, for the same period in 2018, a decrease in the net loss of $153,828, or 5%.
Cash and cash equivalents decreased by $210,103 for the six months ended June 30, 2019 and decreased by $59,470 for the six months ended June 30, 2018. For the six months ended June 30, 2019 and 2018, net cash used by operating activities was $3,386,634 and $1,598,202, respectively, primarily consisting of compensation costs, dermaPACE commercialization activities and general corporate operations. The increase of $1,788,432 in the use of cash for operating activities for the six months ended June 30, 2019, as compared to the same period for 2018, was primarily due to the increased accrued operating and payroll related expenses and increased inventory and prepaid expenses in 2019. Net cash used by investing activities for the six months ended June 30, 2019 and 2018, consisted of purchase of property and equipment of $25,839 and $13,612, respectively. Net cash provided by financing activities for the six months ended June 30, 2019 was $3,219,279, which consisted of $1,403,257 from the exercise of warrants, $1,231,000 from the issuance of short term notes payable and $585,022 from an advance from related parties. Net cash provided by financing activities for the six months ended June 30, 2018 was $1,563,313, which consisted of $144,000 net from advances from related parties, $38,528 from exercise of warrants, $1,159,785 from the issuance of convertible promissory notes, $85,000 from issuance of short term notes payable and $136,000 net from increase in line of credit, related party.
The Company will also host a conference call on Thursday, August 15, 2019, beginning at 9AM Eastern Time to discuss the second quarter financial results, provide a business update and answer questions.
Shareholders and other interested parties can participate in the conference call by dialing 844-369-8770 (U.S.) or 862-298-0840 (international) or via webcast at https://www.investornetwork.com/event/presentation/53271.
A replay of the conference call will be available beginning two hours after its completion through August 22, 2019, by dialing 877-481-4010 (U.S.) or 919-882-2331 and entering PIN #53271 and a replay of the webcast will be available at https://www.investornetwork.com/event/presentation/53271 until November 15, 2019.
About SANUWAVE Health, Inc.
SANUWAVE Health, Inc. (OTCQB:SNWV) (www.SANUWAVE.com) is a shockwave technology company initially focused on the development and commercialization of patented noninvasive, biological response activating devices for the repair and regeneration of skin, musculoskeletal tissue and vascular structures. SANUWAVE’s portfolio of regenerative medicine products and product candidates activate biologic signaling and angiogenic responses, producing new vascularization and microcirculatory improvement, which helps restore the body’s normal healing processes and regeneration. SANUWAVE applies its patented PACE® technology in wound healing, orthopedic/spine, plastic/cosmetic and cardiac conditions. Its lead product candidate for the global wound care market, dermaPACE®, is US FDA cleared for the treatment of Diabetic Foot Ulcers. The device is also CE Marked throughout Europe and has device license approval for the treatment of the skin and subcutaneous soft tissue in Canada, South Korea, Australia and New Zealand. SANUWAVE researches, designs, manufactures, markets and services its products worldwide, and believes it has demonstrated that its technology is safe and effective in stimulating healing in chronic conditions of the foot (plantar fasciitis) and the elbow (lateral epicondylitis) through its U.S. Class III PMA approved OssaTron® device, as well as stimulating bone and chronic tendonitis regeneration in the musculoskeletal environment through the utilization of its OssaTron, Evotron® and orthoPACE® devices in Europe, Asia and Asia/Pacific. In addition, there are license/partnership opportunities for SANUWAVE’s shockwave technology for non-medical uses, including energy, water, food and industrial markets.
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.
For additional information about the Company, visit www.sanuwave.com.
Millennium Park Capital LLC Christopher Wynne 312-724-7845 firstname.lastname@example.org
SANUWAVE Health, Inc. Kevin Richardson II CEO and Chairman of the Board 978-922-2447 email@example.com
(FINANCIAL TABLES FOLLOW)
|SANUWAVE HEALTH, INC. AND SUBSIDIARIES|
|CONDENSED CONSOLIDATED BALANCE SHEETS|
|June 30,||December 31,|
|Cash and cash equivalents||$||154,446||$||364,549|
|Accounts receivable, net of allowance for doubtful accounts of $58,293 in 2019 and $33,045 in 2018||175,041||234,774|
|Due from related parties||-||1,228|
|Prepaid expenses and other current assets||251,616||125,111|
|TOTAL CURRENT ASSETS||1,005,035||1,083,482|
|PROPERTY AND EQUIPMENT, net||85,782||77,755|
|RIGHT OF USE ASSETS||398,698||-|
|Accrued employee compensation||865,900||340,413|
|Lease liability - right of use||167,437||-|
|Advances from related parties||585,022||-|
|Line of credit, related parties||726,009||883,224|
|Accrued interest, related parties||1,504,453||1,171,782|
|Short term notes payable||3,079,767||1,883,163|
|Convertible promissory notes, net||2,860,478||2,652,377|
|Notes payable, related parties, net||5,372,743||5,372,743|
|TOTAL CURRENT LIABILITIES||17,528,808||16,487,091|
|Lease liability - right of use||272,413||-|
|TOTAL NON-CURRENT LIABILITIES||339,774||46,736|
|COMMITMENTS AND CONTINGENCIES|
|PREFERRED STOCK, par value $0.001, 5,000,000|
|shares authorized; no shares issued and outstanding||-||-|
|PREFERRED STOCK, SERIES A CONVERTIBLE, par value $0.001,|
|6,175 designated; 6,175 shares issued and 0 shares outstanding in 2019 and 2018||-||-|
|PREFERRED STOCK, SERIES B CONVERTIBLE, par value $0.001,|
|293 designated; 293 shares issued and 0 shares outstanding in 2019 and 2018||-||-|
|COMMON STOCK, par value $0.001, 350,000,000 shares authorized;|
|188,650,891 and 155,665,138 issued and outstanding in 2019 and 2018, respectively||188,651||155,665|
|ADDITIONAL PAID-IN CAPITAL||103,774,485||101,153,882|
|ACCUMULATED OTHER COMPREHENSIVE LOSS||(63,777||)||(62,868||)|
|TOTAL STOCKHOLDERS' DEFICIT||(16,355,506||)||(15,356,099||)|
|TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT||$||1,513,076||$||1,177,728|
|SANUWAVE HEALTH, INC. AND SUBSIDIARIES|
|CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS|
|Three Months Ended||Three Months Ended||Six Months Ended||Six Months Ended|
|June 30,||June 30,||June 30,||June 30,|
|COST OF REVENUES|
|TOTAL COST OF REVENUES||185,881||166,643||279,734||332,109|
|Research and development||307,273||328,753||567,922||678,197|
|Selling and marketing||407,477||158,695||565,559||210,654|
|General and administrative||1,426,405||1,911,688||2,943,860||2,805,335|
|Loss on sale of property and equipment||-||3,170||-||3,170|
|TOTAL OPERATING EXPENSES||2,150,610||2,408,314||4,095,153||3,708,380|
|OTHER INCOME (EXPENSE)|
|Gain (loss) on warrant valuation adjustment||195,310||1,161,520||227,669||(1,812,162||)|
|Interest expense, related party||(112,984||)||(194,246||)||(332,671||)||(383,457||)|
|Gain (loss) on foreign currency exchange||(7,064||)||1,723||(8,359||)||(15,023||)|
|TOTAL OTHER INCOME (EXPENSE), NET||(714,916||)||(766,512||)||(1,051,800||)||(5,501,907||)|
|OTHER COMPREHENSIVE INCOME (LOSS)|
|Foreign currency translation adjustments||1,489||(11,904||)||(909||)||(10,969||)|
|TOTAL COMPREHENSIVE LOSS||$||(2,732,942||)||$||(2,900,163||)||$||(4,932,657||)||$||(8,755,883||)|
|LOSS PER SHARE:|
|Net loss - basic and diluted||$||(0.02||)||$||(0.02||)||$||(0.03||)||$||(0.06||)|
|Weighted average shares outstanding - basic and diluted||174,730,747||148,582,386||165,921,811||144,168,215|
|SANUWAVE HEALTH, INC. AND SUBSIDIARIES|
|CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT|
|Preferred Stock||Common Stock|
|Number of||Number of||Accumulated|
|Issued and||Issued and||Additional Paid-||Accumulated||Comprehensive|
|Outstanding||Par Value||Outstanding||Par Value||in Capital||Deficit||Loss||Total|
|Balances as of January 1, 2018||-||$||-||139,300,122||$||139,300||$||94,995,040||$||(104,971,384||)||$||(43,783||)||$||(9,880,827||)|
|Cashless warrant exercises||-||-||1,023,130||1,023||117,815||-||-||118,838|
|Proceeds from warrant exercise||-||-||175,666||176||13,352||-||-||13,528|
|Shares issued for services||-||-||551,632||552||78,448||-||-||79,000|
|Warrants issued with convertible promissory notes||-||-||-||-||808,458||-||-||808,458|
|Beneficial conversion feature on convertible promissory notes||-||-||-||-||709,827||-||-||709,827|
|Warrants issued with promissory note||-||-||-||-||36,104||-||-||36,104|
|Beneficial conversion feature on promissory notes||-||-||-||-||35,396||-||-||35,396|
|Foreign currency translation adjustment||-||-||-||-||-||-||935||935|
|Balances as of March 31, 2018||-||$||-||141,050,550||$||141,051||$||96,794,440||$||(110,828,039||)||$||(42,848||)||$||(13,935,396||)|
|Cashless warrant exercises||-||-||4,606,675||4,607||(4,607||)||-||-||-|
|Shares issued for services||-||-||71,532||71||27,429||-||-||27,500|
|Warrants issued for services||-||-||-||-||737,457||-||-||737,457|
|Conversion of promissory notes||-||-||5,896,727||5,897||642,743||-||-||648,640|
|Foreign currency translation adjustment||-||-||-||-||-||-||(11,904||)||(11,904||)|
|Balances as of June 30, 2018||-||$||-||151,852,757||$||151,853||$||99,059,031||$||(113,716,298||)||$||(54,752||)||$||(14,560,166||)|
|Balances as of January 1, 2019||-||-||155,665,138||155,665||101,153,882||(116,602,778||)||(62,868||)||(15,356,099||)|
|Cashless warrant exercises||-||-||704,108||704||(704||)||-||-||-|
|Proceeds from warrant exercise||-||-||620,000||620||52,580||-||-||53,200|
|Other warrant exercise||-||-||3,333,334||3,334||263,333||-||-||266,667|
|Reclassification of warrant liability to equity||-||-||-||-||262,339||1,279,661||-||1,542,000|
|Foreign currency translation adjustment||-||-||-||-||-||-||(2,398||)||(2,398||)|
|Balances as of March 31, 2019||-||$||-||160,322,580||$||160,323||$||101,731,430||$||(117,520,434||)||$||(65,266||)||$||(15,693,947||)|
|Cashless warrant exercises||-||-||2,997,375||2,997||13,003||-||-||16,000|
|Proceeds from warrant exercise||-||-||17,051,769||17,052||1,333,005||-||-||1,350,057|
|Other warrant exercise||-||-||5,804,167||5,804||451,697||-||-||457,501|
|Conversion of line of credit, related parties to equity||-||-||2,475,000||2,475||177,525||-||-||180,000|
|Warrants issued for consulting services||-||-||-||-||36,067||-||-||36,067|
|Foreign currency translation adjustment||-||-||-||-||-||-||1,489||1,489|
|Balances as of June 30, 2019||-||$||-||188,650,891||$||188,651||$||103,774,485||$||(120,254,865||)||$||(63,777||)||$||(16,355,506||)|
|SANUWAVE HEALTH, INC. AND SUBSIDIARIES|
|CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS|
|Six Months Ended||Six Months Ended|
|June 30,||June 30,|
|CASH FLOWS FROM OPERATING ACTIVITIES|
|Adjustments to reconcile loss from operations to net cash used by operating activities|
|Change in allowance for doubtful accounts||25,248||(61,344||)|
|Warrants issued for consulting services||36,067||737,457|
|Waived proceeds from warrant exercise||16,000||-|
|Stock issued for consulting services||-||106,500|
|Loss (gain) on warrant valuation adjustment||(227,669||)||1,812,162|
|Interest payable, related parties||332,671||156,746|
|Amortization of debt issuance costs||-||2,683,936|
|Amortization of debt discount||-||75,484|
|Loss on sale of fixed assets||-||3,170|
|Amortization of operating lease||(3,471||)||-|
|Changes in operating assets and liabilities|
|Accounts receivable - trade||34,485||69,534|
|Due from related parties||1,228||-|
|Accrued employee compensation||525,487||194,194|
|NET CASH USED BY OPERATING ACTIVITIES||(3,386,634||)||(1,598,202||)|
|CASH FLOWS FROM INVESTING ACTIVITIES|
|Purchases of property and equipment||(25,839||)||(13,612||)|
|NET CASH USED BY INVESTING ACTIVITIES||(25,839||)||(13,612||)|
|CASH FLOWS FROM FINANCING ACTIVITIES|
|Proceeds from short term note||1,215,000||85,000|
|Proceeds from warrant exercise||1,403,257||38,528|
|Advances from related parties||585,022||156,000|
|Proceeds from convertible promissory notes, net||-||1,159,785|
|Proceeds from line of credit, related party||-||280,500|
|Proceeds from note payable, product||-||96,708|
|Payment on line of credit, related party||-||(144,500||)|
|Payments on note payable, product||-||(96,708||)|
|Payments on advances from related parties||-||(12,000||)|
|NET CASH PROVIDED BY FINANCING ACTIVITIES||3,203,279||1,563,313|
|EFFECT OF EXCHANGE RATES ON CASH||(909||)||(10,969||)|
|NET DECREASE IN CASH AND CASH EQUIVALENTS||(210,103||)||(59,470||)|
|CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD||364,549||730,184|
|CASH AND CASH EQUIVALENTS, END OF PERIOD||$||154,446||$||670,714|
|NON-CASH INVESTING AND FINANCING ACTIVITIES|
|Other warrant exercise||$||724,168||$||-|
|Conversion of line of credit, related party to equity||$||180,000||$||-|
|Reclassification of warrant liability to equity||$||262,339||$||-|
|Advances from related and unrelated parties converted to Convertible promissory note||$||-||$||310,000|
|Accounts payable converted to convertible promissory notes||$||-||$||120,000|
|Beneficial conversion feature on convertible debt||$||-||$||745,223|
|Warrants issued with debt||$||-||$||844,562|
SANUWAVE Health, Inc.