Suwanee, Ga - (NewMediaWire) - May 21, 2019 - SANUWAVE Health, Inc. (OTCQB:  SNWV) reported financial results for the three months ended March 31, 2019 with the SEC on Monday, May 20, 2019. The Company will also host a conference call today, May 21, 2019 at 9:00 a.m. Eastern Time.  

Highlights from the first quarter and last few weeks:

  • Placed 16 dermaPACE® Systems in the United States, on track for at least 35 placed by end of the second quarter.
  • Over 99% participation in warrant exercise May 1, 2019, providing growth capital to the Company.
  • Engaged Alira Health to explore the European wound market for strategic alternatives and partnerships.
  • Added new sales managers in the Carolinas (North and South), Pennsylvania, and Texas during April and May.
  • Initial billing of claims began in select markets and will accelerate throughout the year.
  • Sponsoring an initial case series to quantify the level of increased perfusion and oxygenation during and after treatment of Diabetic Foot Ulcers (DFUs) with the dermaPACE System.
  • Launched a study in Poland to observe how DFU’s respond to the dermaPACE System treatment in conjunction with standard of care in three different dosage regimens that use a higher number of shockwaves when compared to the U.S. Phase III study.
  • Major presence at tradeshows and symposium in the four months following first quarter
    • Modern Wound Care Management, Greensboro, NC (April 26 - 27, 2019)
    • Symposium of Advanced Wound Care (SAWC) Spring, San Antonio, TX (May 7 -11, 2019)
    • International Symposium of the Diabetic Foot (ISDF), The Hague, The Netherlands (May 22 – 25, 2019)
    • European Wound Management Association (EWMA), Gothenburg, Sweden (June 5 – 7, 2019)
    • “The National” American Podiatric Medical Association (APMA), Salt Lake City, UT (July 11 – 14, 2019)
  • Expanded our patent portfolio as follows:
    U.S. patent number US 10,238,405 entitled “Blood Vessel Treatment with Intracorporeal Pressure Shock Waves”
    European patent number EP 3,117,784 entitled “Usage of Intracorporeal Pressure Shock Waves in Medicine”   

“SANUWAVE’s focus during 2019 remains placing devices with qualified clinicians in six target states.  To that end we exceeded our goal for the first quarter and are comfortable raising full year placement guidance by 10% to 110 devices by year end.  First quarter revenue was lower due to timing of orders from our domestic partners, which will be up full year over full year.  These orders may be lumpy on a quarter to quarter basis as the roll out proceeds, and until we gain critical mass on the recurring per procedure revenue.  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, “The feedback from initial placements is positive and extremely encouraging.  Patients share excitement because of their week to week improvements and clinicians appreciate the ease of use and delivery of the treatment in their DFU patients. The SANUWAVE team is confident our increased dermaPACE placements will result in continued positive activity, supporting reimbursement and ultimately expanding our coverage and DFU treatment well beyond our currently targeted markets.”  

Goals for 2019

  • 110 dermaPACE system placements (up from prior guidance of 100) and 300 certified users
  • Finish with at least 10 million covered lives for insurance reimbursement
  • Launch 2-3 domestic clinical studies
  • Add 3-4 new countries
  • Add additional advisors to our scientific board
  • Add other key senior management positions

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.

First Quarter Financial Results

Revenues for the three months ended March 31, 2019 were $177,963, compared to $344,272 for the same period in 2018, a decrease of $166,309, or 48%.  Revenue resulted primarily from sales in Europe of our orthoPACE® devices and related applicators, sales in the United States of our dermaPACE applicators and upfront distribution fee from our Southeast Asia distribution agreement with Johnfk Medical Inc. (“FKS”).  The decrease in revenue for 2019 is primarily due to a decrease in sales of dermaPACE devices in the United States as we had our initial order of dermaPACE devices from Premier Shockwave in February 2018, a decrease in sales of orthoPACE devices in Asia/Pacific and the European Community, as compared to the prior year.

Operating expenses for the three months ended March 31, 2019 were $1,944,542, compared to $1,300,066 for the same period in 2018, an increase of $644,476, or 50%.  Research and development expenses increased by $22,525.  The increase was due to an increase in temporary wages as a result of contracting for temporary services and increased study expenses related to our new dosage study in Poland.  Selling and marketing expenses increased $106,124.  The increase was due to an increase in hiring of trainers and salespeople and increased travel for placement and training related to the commercialization of dermaPACE.  General and administrative expenses increased $512,487.  The increase was due to an increase in salary and benefits related to new hires in 2018, increased legal costs associated with SEC filings and patent issuance and maintenance, increased consulting expenses related to our insurance reimbursement strategy for the commercialization of dermaPACE in the United States and one-time expense related to email spoofing cyber security breach.

Net loss for the three months ended March 31, 2019 was $2,197,317, or ($0.01) per basic and diluted share, compared to a net loss of $5,856,655, or ($0.04) per basic and diluted share, for the same period in 2018, a decrease in the net loss of $3,659,338, or 62%.  The decrease in the net loss was primarily a result of a decrease in other income (expense), partially offset by an increase in our operating expenses as described above.

Cash and cash equivalents decreased by $265,603 for the three months ended March 31, 2019 and decreased by $575,979 for the three months ended March 31, 2018.  For the three months ended March 31, 2019 and 2018, net cash used by operating activities was $1,285,551 and $1,848,565, respectively, primarily consisting of compensation costs, research and development activities and general corporate operations. The decrease of $563,014 in the use of cash for operating activities for the three months ended March 31, 2019, as compared to the same period for 2018, was primarily due to the increased accrued operating and payroll related expenses and increased receivables in 2019.  Net cash used by investing activities for the three months ended March 31, 2019 and 2018, consisted of purchase of property and equipment of $22,054 and $7,720, respectively.  Net cash provided by financing activities for the three months ended March 31, 2019 was $1,044,400, which consisted of $319,867 from the exercise of warrants, $698,333 from the issuance of short term notes payable and $26,200 from an advance from related parties.  Net cash provided by financing activities for the three months ended March 31, 2018 was $1,279,371, which consisted of $12,000 from advances from related parties, $13,528 from exercise of warrants, $1,159,785 from the issuance of convertible promissory notes and $94,058 from issuance of note payable, product.

Conference Call 

The Company will host a conference call on Tuesday, May 21, 2019, beginning at 9AM Eastern Time to discuss the first quarter 2019 financial results, provide a business update and answer questions.

Shareholders and other interested parties can participate in the conference call by dialing 844-602-0380 (U.S.) or 862-298-0970 (international) or via webcast at https://www.investornetwork.com/event/presentation/49197.

A replay of the conference call will be available beginning two hours after its completion through May 28, 2019, by dialing 877-481-4010 or 919-882-2331 and entering PIN #49197 and a replay of the webcast will be available at https://www.investornetwork.com/event/presentation/49197 until August 21, 2019.

About SANUWAVE Health, Inc. 
SANUWAVE Health, Inc. (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 CE Marked throughout Europe and has device license approval for the treatment of the skin and subcutaneous soft tissue in Canada, Australia, and New Zealand.  In the U.S., dermaPACE®, is currently under the FDA’s Premarket Approval (PMA) review process for the treatment of diabetic foot ulcers.  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
Chairman of the Board
978-922-2447
investorrelations@sanuwave.com or Kevin.richardson@sanuwave.com

 

(FINANCIAL TABLES FOLLOW)

                 
    SANUWAVE HEALTH, INC. AND SUBSIDIARIES  
    CONDENSED CONSOLIDATED BALANCE SHEETS  
                 
                 
           March 31,     December 31,   
            2019       2018    
      ASSETS   (Unaudited)      
CURRENT ASSETS            
  Cash and cash equivalents     $   98,946     $   364,549    
  Accounts receivable, net of allowance for doubtful accounts          
    of $24,400 in 2019 and $33,045 in 2018         139,840         234,774    
  Due from related parties         2,699         1,228    
  Inventory         328,384         357,820    
  Prepaid expenses and other current assets         196,561         125,111    
  TOTAL CURRENT ASSETS         766,430         1,083,482    
                 
PROPERTY AND EQUIPMENT, net         91,452         77,755    
                 
RIGHT OF USE ASSETS         437,363       -         
                 
OTHER ASSETS         23,504         16,491    
  TOTAL ASSETS     $   1,318,749     $   1,177,728    
                 
      LIABILITIES          
CURRENT LIABILITIES            
  Accounts payable     $   1,780,108     $   1,592,643    
  Accrued expenses         753,394         689,280    
  Accrued employee compensation         577,220         340,413    
  Contract liabilities         129,264         131,797    
  Lease liability - right of use         164,521       -         
  Advances from related parties         26,200        -         
  Line of credit, related parties         895,967         883,224    
  Accrued interest, related parties         1,391,469         1,171,782    
  Short term notes payable         2,611,731         1,883,163    
  Convertible promissory notes, net         2,756,427         2,652,377    
  Notes payable, related parties, net         5,372,743         5,372,743    
  Warrant liability          195,310         1,769,669    
  TOTAL CURRENT LIABILITIES         16,654,354         16,487,091    
                 
NON-CURRENT LIABILITIES            
  Contract liabilities         42,612         46,736    
  Lease liability - right of use         315,730       -         
  TOTAL NON-CURRENT LIABILITIES         358,342         46,736    
  TOTAL LIABILITIES         17,012,696         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 2018 and 2017       -            -         
                 
PREFERRED STOCK, SERIES B CONVERTIBLE, par value $0.001,          
  293 designated;  293 shares issued and 0 shares outstanding          
  in 2018 and 2017       -             -         
                 
COMMON STOCK, par value $0.001, 350,000,000 shares authorized;          
  160,322,580 and 155,665,138 issued and outstanding in 2019 and          
  2018, respectively         160,323         155,665    
                 
ADDITIONAL PAID-IN CAPITAL         101,731,430         101,153,882    
                 
ACCUMULATED DEFICIT         (117,520,434 )       (116,602,778 )  
                 
ACCUMULATED OTHER COMPREHENSIVE LOSS       (65,266 )       (62,868 )  
  TOTAL STOCKHOLDERS' DEFICIT         (15,693,947 )       (15,356,099 )  
  TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT   $   1,318,749     $   1,177,728    
                 

 

                 
  SANUWAVE HEALTH, INC. AND SUBSIDIARIES  
  CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS  
  (UNAUDITED)  
                 
                 
         Three Months Ended     Three Months Ended     
         March 31,     March 31,     
          2019       2018      
                 
REVENUES            
  Product   $   64,565     $   238,568      
  License fees       106,250         84,116      
  Other revenue       7,148         21,588      
    TOTAL REVENUES       177,963         344,272      
                 
COST OF REVENUES            
  Product       65,112         125,594      
  Other       28,741         39,872      
    TOTAL COST OF REVENUES       93,853         165,466      
                 
GROSS MARGIN       84,110         178,806      
                 
OPERATING EXPENSES            
  Research and development       261,002         238,477      
  Selling and marketing       158,083         51,959      
  General and administrative       1,517,101         1,004,614      
  Depreciation       8,357         5,016      
    TOTAL OPERATING EXPENSES       1,944,542         1,300,066      
                 
    OPERATING LOSS       (1,860,432 )       (1,121,260 )    
                 
OTHER INCOME (EXPENSE)            
  Gain (loss) on warrant valuation adjustment       32,359         (2,973,682 )    
  Interest expense       (148,261 )       (1,555,756 )    
  Interest expense, related party       (219,687 )       (189,211 )    
  Loss on foreign currency exchange       (1,296 )       (16,746 )    
    TOTAL OTHER INCOME (EXPENSE), NET       (336,885 )       (4,735,395 )    
                 
    NET LOSS       (2,197,317 )       (5,856,655 )    
                 
OTHER COMPREHENSIVE INCOME (LOSS)            
  Foreign currency translation adjustments       (2,398 )       935      
    TOTAL COMPREHENSIVE LOSS   $   (2,199,715 )   $   (5,855,720 )    
                 
LOSS PER SHARE:            
  Net loss - basic and diluted   $   (0.01 )   $   (0.04 )    
                 
  Weighted average shares outstanding - basic and diluted       157,112,875         139,754,044      
                 

 

                                     
  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 December 31, 2017   -        $ -          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 )  
                                     
                                     
Balances as of December 31, 2018   -          -          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    
  Conversion of short term notes payable to equity   -          -          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 )  
                                     

 

               
  SANUWAVE HEALTH, INC. AND SUBSIDIARIES  
  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  
  (UNAUDITED)  
               
         Three Months Ended     Three Months Ended   
         March 31,     March 31,   
          2019       2018    
               
CASH FLOWS FROM OPERATING ACTIVITIES            
Net loss     $   (2,197,317 )   $   (5,856,655 )  
  Adjustments to reconcile loss from operations            
  to net cash used by operating activities            
  Depreciation         8,357         5,016    
  Change in allowance for doubtful accounts         (8,645 )       (19,613 )  
  Loss (gain) on warrant valuation adjustment         (32,359 )       2,973,682    
  Amortization of operating lease         38,666       -         
  Amortization of debt issuance costs       -              1,473,872    
  Amortization of debt discount        -              37,984    
  Stock issued for consulting services        -              79,000    
  Accrued interest         147,028       -         
  Interest payable, related parties         219,687         80,613    
  Changes in operating assets and liabilities            
    Accounts receivable - trade         103,579         20,449    
    Inventory         29,436         (32,734 )  
    Prepaid expenses         (71,450 )       (110,672 )  
    Contract assets       -              (55,700 )  
    Due from related parties         (1,471 )     -         
    Other assets         (7,013 )       (3,336 )  
    Accounts payable         187,465         (553,763 )  
    Accrued expenses         64,114         (64,744 )  
    Accrued employee compensation         236,807         68,822    
    Operating leases         4,222       -         
    Contract liabilties         (6,657 )       109,214    
  NET CASH USED BY OPERATING ACTIVITIES         (1,285,551 )       (1,848,565 )  
               
CASH FLOWS FROM INVESTING ACTIVITIES            
  Purchases of property and equipment         (22,054 )       (7,720 )  
  NET CASH USED BY INVESTING ACTIVITIES         (22,054 )       (7,720 )  
               
CASH FLOWS FROM FINANCING ACTIVITIES            
  Proceeds from short term note         965,000       -         
  Proceeds from warrant exercise         53,200         13,528    
  Advances from related parties         26,200         12,000    
  Proceeds from convertible promissory notes, net       -              1,159,785    
  Proceeds from note payable, product       -              96,708    
  Payments on note payable, product        -              (2,650 )  
  NET CASH PROVIDED BY FINANCING ACTIVITIES         1,044,400         1,279,371    
               
EFFECT OF EXCHANGE RATES ON CASH         (2,398 )       935    
               
  NET DECREASE IN CASH AND CASH EQUIVALENTS         (265,603 )       (575,979 )  
               
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD         364,549         730,184    
  CASH AND CASH EQUIVALENTS, END OF PERIOD     $   98,946     $   154,205    
               
               
NON-CASH INVESTING AND FINANCING ACTIVITIES            
               
  Conversion of short term notes payable     $   266,667     $ -         
               
               
  Reclassification of warrant liability to equity     $   262,339     $ -         
               
               
  Advances payable converted to convertible promissory notes     $ -          $   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