For the three months ended
- Revenue for the three months ended
June 30, 2023 totaled$4.7 million , an increase of 20%, as compared to$3.9 million for the same period of 2022. This growth falls within the previously provided guidance range of 15-25% for Q2 2023. Revenue for the six months endedJune 30, 2023 totaled$8.5 million , an increase of 19%, as compared to$7.1 million for the same period of 2022. - 49 UltraMist® systems were sold in Q2 2023, up from 28 in Q1 of this year.
- UltraMist® consumables revenue increased 25% to
$2.8 million , versus$2.2 million for the same quarter last year on a 14% increase in treatments. Revenue growth outpaced treatments due to higher average sale prices. - UltraMist® consumables revenue was 59% of overall revenue for Q2, up from 56% in the prior year period. This was primarily driven by a larger installed base, improved pricing, and higher usage rates.
- Gross margin as a percentage of revenue increased to 74% for the three months ended
June 30, 2023 , vs 72% for the same period last year, primarily driven by stronger pricing initiatives. - For the three months ended
June 30, 2023 , operating income totaled$0.9 million , which is an improvement of$4.0 million compared to the same period in 2022. This number benefited from a$1.25 million one-time reversal of accrued expenses and was partially offset by a$224 thousand non-cash stock compensation issuance. - Net loss for the three months ended
June 30, 2023 was$7.3 million , compared to a net income of$1.6 million for the same period in 2022. The increase in net loss for the three months endedJune 30, 2023 was primarily due to continued non-cash losses on the fair value of derivative liabilities. - The Company anticipates third quarter 2023 revenue growth will fall within a range of 15-25% as compared to the third quarter of 2022.
Recent Highlights from Q2 2023:
- Appointment of
Morgan Frank as Chief Executive Officer in May. - Appointment of
Andrew Walko as President and to head manufacturing in July. - Signing of Distribution Agreement with
Pacific Medical, Inc. bringing its sales force of over 215 representatives covering 7 western states to the UltraMist line of directed energy wound care products. - In
July 2023 , the Company issued Asset-Backed Secured Promissory Notes for which it received total proceeds of approximately$3.0 million . SANUWAVE showcased its innovative non-invasive, regenerative medicine solutions for the treatment of chronic wounds at the Leaders inWound Healing Conference inNew Orleans, Louisiana , the Symposium on Advanced Wound Care Spring inNational Harbor ,Maryland , and the EWMA 2023 Symposium inMilan, Italy .- Leading plastic surgeon,
Dr. Johnson presented on UltraMist at the Serena Foundation Leadership inWound Conference .
“We are pleased to have generated significant revenue growth in Q2 despite ongoing capacity constraints,” said CEO
Guidance
The Company continued to have constrained inventory supply during Q2 2023 and anticipates this will improve in Q3, but remain a significant factor. The Company anticipates Q3 2023 revenue growth of approximately 15% to 25% year over year.
As previously announced, a business update will occur via conference call on
Telephone access is available by dialing the following numbers:
Conference ID: 13740603
Telephone access to the call will be available by dialing the following numbers:
Participant Listening: 1-877-407-0784 or 1-201-689-8560
OR click the Call me™ link for instant telephone access to the event.
https://callme.viavid.com/viavid/?callme=true&passcode=13732361&h=true&info=company&r=true&B=6
A replay will be made available through
Replay Dial-In: 1-844-512-2921 or 1-412-317-6671
Access ID: 13740603
About
SANUWAVE’s end-to-end wound care portfolio of regenerative medicine products and product candidates help restore the body’s normal healing processes.
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 future financial results, production expectations and constraints, 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
CONTACT:
Investors@Sanuwave.com
PART I -- FINANCIAL INFORMATION | ||||||||||||
ITEM 1. FINANCIAL STATEMENTS | ||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||||
(UNAUDITED) | ||||||||||||
(In thousands, except share data) | ||||||||||||
ASSETS | ||||||||||||
Current Assets: | ||||||||||||
Cash | $ | 332 | $ | 1,153 | ||||||||
Restricted Cash | 850 | - | ||||||||||
Accounts receivable, net of allowance of | 2,818 | 4,029 | ||||||||||
Inventory | 900 | 868 | ||||||||||
Prepaid expenses and other current assets | 1,201 | 570 | ||||||||||
Total Current Assets | 6,101 | 6,620 | ||||||||||
Property, equipment and other, net | 1,050 | 856 | ||||||||||
Intangible assets, net | 4,786 | 5,137 | ||||||||||
7,260 | 7,260 | |||||||||||
Total Non-current Assets | 13,096 | 13,253 | ||||||||||
Total Assets | $ | 19,197 | $ | 19,873 | ||||||||
LIABILITIES | ||||||||||||
Current Liabilities: | ||||||||||||
Senior secured debt, in default | $ | 16,123 | $ | 14,416 | ||||||||
Convertible promissory notes payable | 17,712 | 16,713 | ||||||||||
Convertible promissory notes payable, related parties | 8,346 | 7,409 | ||||||||||
Bridge notes advance | 1,476 | - | ||||||||||
Accounts payable | 4,859 | 4,400 | ||||||||||
Accrued expenses | 6,351 | 8,512 | ||||||||||
Factoring liabilities | 1,213 | 2,130 | ||||||||||
Warrant liability | 14,410 | 1,416 | ||||||||||
Accrued interest | 6,174 | 4,052 | ||||||||||
Accrued interest, related parties | 1,438 | 788 | ||||||||||
Current portion of contract liabilities | 67 | 60 | ||||||||||
Other | 1,108 | 291 | ||||||||||
Total Current Liabilities | 79,277 | 60,187 | ||||||||||
Non-current Liabilities | ||||||||||||
Lease liabilities | 515 | 438 | ||||||||||
Contract liabilities | 215 | 230 | ||||||||||
Deferred tax liability | 28 | 28 | ||||||||||
Total Non-currrent Liabilities | 758 | 696 | ||||||||||
Total Liabilities | $ | 80,035 | $ | 60,883 | ||||||||
Commitments and Contingencies (Footnote 13) | ||||||||||||
STOCKHOLDERS' DEFICIT | ||||||||||||
Preferred Stock, par value | ||||||||||||
6,175 shares Series A, 293 shares Series B, 90 shares Series C and 8 shares Series D | $ | - | $ | - | ||||||||
no shares issued and outstanding at | ||||||||||||
Common Stock, par value | ||||||||||||
issued and outstanding at | 562 | 549 | ||||||||||
Additional paid-in capital | 153,264 | 152,750 | ||||||||||
Accumulated deficit | (214,584 | ) | (194,242 | ) | ||||||||
Accumulated other comprehensive loss | (80 | ) | (67 | ) | ||||||||
Total Stockholders' Deficit | (60,838 | ) | (41,010 | ) | ||||||||
Total Liabilities and Stockholders' Deficit | $ | 19,197 | $ | 19,873 | ||||||||
The accompanying notes to condensed consolidated financial statement are an integral part of these financial statements. | ||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS)/INCOME | ||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||
(In thousands, except share data) | ||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||
Revenue | $ | 4,675 | $ | 3,882 | $ | 8,450 | $ | 7,077 | ||||||||||
Cost of Revenues | 1,202 | 1,096 | 2,464 | 1,986 | ||||||||||||||
Gross Margin | 3,473 | 2,786 | 5,986 | 5,091 | ||||||||||||||
Operating Expenses: | ||||||||||||||||||
General and administrative | 1,238 | 3,781 | 3,997 | 5,986 | ||||||||||||||
Selling and marketing | 978 | 1,672 | 2,390 | 3,387 | ||||||||||||||
Research and development | 139 | 171 | 270 | 337 | ||||||||||||||
Depreciation and amortization | 187 | 210 | 376 | 386 | ||||||||||||||
Total Operating Expenses | 2,542 | 5,834 | 7,033 | 10,096 | ||||||||||||||
Operating Income/(Loss) | 931 | (3,048 | ) | (1,047 | ) | (5,005 | ) | |||||||||||
Other Income (Expense): | ||||||||||||||||||
Interest expense | (3,706 | ) | (2,903 | ) | (7,218 | ) | (6,040 | ) | ||||||||||
Interest expense, related party | (675 | ) | (56 | ) | (1,441 | ) | (112 | ) | ||||||||||
Change in fair value of derivative liabilities | (3,821 | ) | 7,861 | (10,618 | ) | 11,343 | ||||||||||||
Loss on issuance of debt | - | - | - | (3,434 | ) | |||||||||||||
Loss on extinguishment of debt | - | (211 | ) | - | (211 | ) | ||||||||||||
Other (expense) income | 9 | 1 | (18 | ) | 2 | |||||||||||||
Total Other (Expense)/Inocme | (8,193 | ) | 4,692 | (19,295 | ) | 1,548 | ||||||||||||
Net (Loss)/Income before Income Taxes | (7,262 | ) | 1,644 | (20,342 | ) | (3,457 | ) | |||||||||||
Provision for Income Taxes | - | - | - | - | ||||||||||||||
Net (Loss)/Income | (7,262 | ) | 1,644 | (20,342 | ) | (3,457 | ) | |||||||||||
Other Comprehensive Loss | ||||||||||||||||||
Foreign currency translation adjustments | (9 | ) | - | (13 | ) | - | ||||||||||||
Total Comprehensive (Loss)/Income | $ | (7,271 | ) | $ | 1,644 | $ | (20,355 | ) | $ | (3,457 | ) | |||||||
(Loss) income per Share: | ||||||||||||||||||
Basic | $ | (0.01 | ) | $ | - | $ | (0.04 | ) | $ | (0.01 | ) | |||||||
Diluted | $ | (0.01 | ) | $ | - | $ | (0.04 | ) | $ | (0.01 | ) | |||||||
Weighted average shares outstanding | ||||||||||||||||||
Basic | 582,328,811 | 538,560,051 | 579,178,811 | 532,589,825 | ||||||||||||||
Diluted | 582,328,811 | 871,984,091 | 579,178,811 | 532,589,825 | ||||||||||||||
The accompanying notes to condensed consolidated financial | ||||||||||||||||||
statements are an integral part of these financial statements. | ||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT | ||||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||||
(In thousands, except share data) | ||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||
Common Stock | ||||||||||||||||||||||
Number of | Accumulated | |||||||||||||||||||||
Shares | Other | |||||||||||||||||||||
Issued and | Additional Paid- | Accumulated | Comprehensive | |||||||||||||||||||
Outstanding | Par Value | in Capital | Deficit | Loss | Total | |||||||||||||||||
Balances as of | 555,637,651 | $ | 556 | $ | 153,046 | $ | (207,322 | ) | $ | (71 | ) | $ | (53,791 | ) | ||||||||
Shares issued for services | 6,000,000 | 6 | 218 | - | 224 | |||||||||||||||||
Net loss | - | - | - | - | (7,262 | ) | - | - | (7,262 | ) | ||||||||||||
Foreign currency translation adjustment | - | - | - | - | (9 | ) | (9 | ) | ||||||||||||||
Balances as of | 561,637,651 | $ | 562 | $ | 153,264 | $ | (214,584 | ) | $ | (80 | ) | $ | (60,838 | ) | ||||||||
Three Months Ended | ||||||||||||||||||||||
Common Stock | ||||||||||||||||||||||
Number of | Accumulated | |||||||||||||||||||||
Shares | Other | |||||||||||||||||||||
Issued and | Additional Paid- | Accumulated | Comprehensive | |||||||||||||||||||
Outstanding | Par Value | in Capital | Deficit | Loss | Total | |||||||||||||||||
Balances as of | 517,195,705 | $ | 517 | $ | 150,533 | $ | (189,050 | ) | $ | (67 | ) | $ | (38,067 | ) | ||||||||
Shares issued for services | 12,097,500 | 12 | 876 | - | - | 888 | ||||||||||||||||
Net Income | - | - | - | - | 1,644 | - | - | 1,644 | ||||||||||||||
Foreign currency translation adjustment | - | - | - | - | - | |||||||||||||||||
Balances as of | 529,293,205 | $ | 529 | $ | 151,409 | $ | (187,406 | ) | $ | (67 | ) | $ | (35,535 | ) | ||||||||
The accompanying notes to condensed consolidated financial | ||||||||||||||||||||||
statements are an integral part of these financial statements. | ||||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT | |||||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||||
(In thousands, except share data) | |||||||||||||||||||||
Six Months Ended | |||||||||||||||||||||
Common Stock | |||||||||||||||||||||
Number of | Accumulated | ||||||||||||||||||||
Shares | Other | ||||||||||||||||||||
Issued and | Additional Paid- | Accumulated | Comprehensive | ||||||||||||||||||
Outstanding | Par Value | in Capital | Deficit | Loss | Total | ||||||||||||||||
Balances as of | 548,737,651 | $ | 549 | $ | 152,750 | $ | (194,242 | ) | $ | (67 | ) | $ | (41,010 | ) | |||||||
Shares issued for services | 12,900,000 | 13 | 514 | - | - | 527 | |||||||||||||||
Net loss | - | - | - | (20,342 | ) | - | (20,342 | ) | |||||||||||||
Foreign currency translation adjustment | - | - | - | - | (13 | ) | (13 | ) | |||||||||||||
Balances as of | 561,637,651 | $ | 562 | $ | 153,264 | $ | (214,584 | ) | $ | (80 | ) | $ | (60,838 | ) | |||||||
Six Months Ended | |||||||||||||||||||||
Common Stock | |||||||||||||||||||||
Number of | Accumulated | ||||||||||||||||||||
Shares | Other | ||||||||||||||||||||
Issued and | Additional Paid- | Accumulated | Comprehensive | ||||||||||||||||||
Outstanding | Par Value | in Capital | Deficit | Loss | Total | ||||||||||||||||
Balances as of | 481,619,621 | $ | 482 | $ | 144,582 | $ | (183,949 | ) | $ | (73 | ) | $ | (38,958 | ) | |||||||
Cashless warrant exercise | 14,000,000 | 14 | 2,152 | - | - | 2,166 | |||||||||||||||
Warrant exercise | 909,091 | 1 | 99 | - | - | 100 | |||||||||||||||
Shares issued in conjunction with Note Payable | 20,666,993 | 20 | 3,700 | - | - | 3,720 | |||||||||||||||
Shsares issued for services | 12,097,500 | 12 | 876 | - | - | 888 | |||||||||||||||
Net loss | - | - | - | (3,457 | ) | - | (3,457 | ) | |||||||||||||
Foreign currency translation adjustment | - | - | - | - | 6 | 6 | |||||||||||||||
Balances as of | 529,293,205 | $ | 529 | $ | 151,409 | $ | (187,406 | ) | $ | (67 | ) | $ | (35,535 | ) | |||||||
The accompanying notes to condensed consolidated financial | |||||||||||||||||||||
statements are an integral part of these financial statements. | |||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
(UNAUDITED) | |||||||||||
(In thousands) | |||||||||||
Six Months Ended | |||||||||||
2023 | 2022 | ||||||||||
Cash Flows - Operating Acivities: | |||||||||||
Net loss | $ | (20,342 | ) | $ | (3,457 | ) | |||||
Adjustments to reconcile net loss to net cash used by operating activities | |||||||||||
Depreciation and amortization | 515 | 446 | |||||||||
Bad debt expense | 313 | 52 | |||||||||
Shares issued for services | 224 | 888 | |||||||||
Change in fair value of derivative liabilities | 10,618 | (11,343 | ) | ||||||||
Loss on extinguishment of debt | - | 211 | |||||||||
Loss on issuance of debt | - | 3,434 | |||||||||
Amortization of debt issuance costs and original issue discount | 3,955 | 1,304 | |||||||||
Accrued interest | 3,606 | 1,327 | |||||||||
Changes in operating assets and liabilities | |||||||||||
Accounts receivable - trade | 898 | 733 | |||||||||
Inventory | (31 | ) | 115 | ||||||||
Prepaid expenses and other assets | (336 | ) | (27 | ) | |||||||
Accounts payable | 718 | (486 | ) | ||||||||
Accrued expenses | (1,337 | ) | 1,710 | ||||||||
Contract liabilties | (16 | ) | (108 | ) | |||||||
(1,215 | ) | (5,201 | ) | ||||||||
Cash Flows - Investing Activities | |||||||||||
Proceeds from sale of property and equipment | - | 948 | |||||||||
Purchase of property and equipment | (169 | ) | - | ||||||||
Net Cash Flows (Used in)/Provided by Investing Activities | (169 | ) | 948 | ||||||||
Cash Flows - Financing Activities | |||||||||||
Proceeds from senior promissory notes | - | 2,940 | |||||||||
Proceeds from convertible promissory notes payable | 1,202 | - | |||||||||
Proceeds from bridge notes advance | 1,476 | 2,130 | |||||||||
Payments to factoring agent, net | (1,167 | ) | 55 | ||||||||
Proceeds from warrant exercises | - | 100 | |||||||||
Payments of principal on finance leases | (85 | ) | (121 | ) | |||||||
Net Cash Flows Provided by Financing Activities | 1,426 | 5,104 | |||||||||
Effect of Exchange Rates on Cash | (13 | ) | 14 | ||||||||
Net Change in Cash and Restricted Cash During Period | 29 | 865 | |||||||||
Cash and Restricted Cash at Beginning of Period | 1,153 | 619 | |||||||||
Cash and Restricted Cash at End of Period | $ | 1,182 | $ | 1,484 | |||||||
Supplemental Information: | |||||||||||
Cash paid for interest | $ | 908 | $ | 2,045 | |||||||
Non-cash Investing and Financing Activities: | |||||||||||
Warrants issued in conjunction with senior secured promissory note payable and convertible promissory notes payable | $ | 570 | $ | 2,654 | |||||||
Common shares issued for advisory shares | 302 | - | |||||||||
Embedded conversion feature on convertible promissory notess payable | 157 | ||||||||||
Reclassification of warrant liability due to cashless warrant exercise | - | 2,167 | |||||||||
Common shares issued in conjunction with senior secured promissory note payable | - | 3,720 | |||||||||
The accompanying notes to condensed consolidated financial statements are an integral part of these financial statements. | |||||||||||
Source:
2023 GlobeNewswire, Inc., source