SNWV - SANUWAVE Raises Guidance For Full Year To 110 Device Placements
SUWANEE, Ga., May 21, 2019 (GLOBE NEWSWIRE) -- via NEWMEDIAWIRE -- 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 |