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.

Conference Call 

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.

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.

For additional information about the Company, visit www.sanuwave.com.

Contact:

Millennium Park Capital LLC
Christopher Wynne
312-724-7845
cwynne@mparkcm.com

SANUWAVE Health, Inc.
Kevin Richardson II
CEO and Chairman of the Board
978-922-2447
investorrelations@sanuwave.com 

(FINANCIAL TABLES FOLLOW)


    
    
SANUWAVE HEALTH, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
    
    
 June 30, December 31,
 2019 2018
ASSETS(Unaudited)  
CURRENT ASSETS   
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 
Inventory 423,932   357,820 
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   - 
    
OTHER ASSETS 23,561   16,491 
TOTAL ASSETS$1,513,076  $1,177,728 
    
LIABILITIES   
CURRENT LIABILITIES   
Accounts payable$1,456,727  $1,592,643 
Accrued expenses 795,458   689,280 
Accrued employee compensation 865,900   340,413 
Contract liabilities 114,814   131,797 
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 
Warrant liability -   1,769,669 
TOTAL CURRENT LIABILITIES 17,528,808   16,487,091 
    
NON-CURRENT LIABILITIES   
Contract liabilities 67,361   46,736 
Lease liability - right of use 272,413   - 
TOTAL NON-CURRENT LIABILITIES 339,774   46,736 
TOTAL LIABILITIES 17,868,582   16,533,827 
    
COMMITMENTS AND CONTINGENCIES   
    
STOCKHOLDERS' DEFICIT   
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 DEFICIT (120,254,865)  (116,602,778)
    
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
(UNAUDITED)
         
         
   Three Months Ended   Three Months Ended   Six Months Ended   Six Months Ended 
   June 30,   June 30,   June 30,   June 30, 
  2019 2018 2019 2018
         
REVENUES        
Product $  220,667  $  243,465  $  285,232  $  482,033 
License fees    66,808     203,757     173,058     287,873 
Other revenue    29,501     5,988     36,649     27,576 
TOTAL REVENUES    316,976     453,210     494,939     797,482 
         
COST OF REVENUES        
Product    178,458     128,716     243,570     254,309 
Other    7,423     37,927     36,164     77,800 
TOTAL COST OF REVENUES    185,881     166,643     279,734     332,109 
         
GROSS MARGIN    131,095     286,567     215,205     465,373 
         
OPERATING EXPENSES        
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 
Depreciation    9,455     6,008     17,812     11,024 
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 
         
OPERATING LOSS    (2,019,515)    (2,121,747)    (3,879,948)    (3,243,007)
         
OTHER INCOME (EXPENSE)        
Gain (loss) on warrant valuation adjustment    195,310     1,161,520     227,669     (1,812,162)
Interest expense    (790,178)    (1,735,509)    (938,439)    (3,291,265)
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)
         
NET LOSS    (2,734,431)    (2,888,259)    (4,931,748)    (8,744,914)
         
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
(UNAUDITED)
                 
                 
  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 January 1, 2018 - $- 139,300,122 $139,300 $94,995,040  $(104,971,384) $(43,783) $(9,880,827)
Net loss -  - -  -  -   (5,856,655)  -   (5,856,655)
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)
Net loss -  - -  -  -   (2,888,259)  -   (2,888,259)
Warrant exercises -  - 227,273  227  24,773   -   -   25,000 
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 
Stock-based compensation -  - -  -  836,796   -   -   836,796 
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)
Net loss -  - -  -  -   (2,197,317)  -   (2,197,317)
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)
Net loss -  - -  -  -   (2,734,431)  -   (2,734,431)
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 
Stock-based compensation -  - -  -  31,758   -   -   31,758 
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
(UNAUDITED)
    
 Six Months Ended Six Months Ended
 June 30, June 30,
 2019 2018
    
CASH FLOWS FROM OPERATING ACTIVITIES   
Net loss$(4,931,748) $(8,744,914)
Adjustments to reconcile loss from operations to net cash used by operating activities   
Depreciation 17,812   11,024 
Change in allowance for doubtful accounts 25,248   (61,344)
Stock-based compensation 31,758   836,796 
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 
Accrued interest 936,658   168,787 
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 
Inventory (66,112)  15,216 
Prepaid expenses (126,505)  (54,528)
Contract assets -   (40,000)
Due from related parties 1,228   - 
Other assets (7,070)  (3,872)
Accounts payable (135,916)  (425,489)
Accrued expenses 106,178   91,459 
Accrued employee compensation 525,487   194,194 
Operating leases 44,623   - 
Contract liabilities 3,642   769,480 
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 
    

 

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