8-K
SANUWAVE Health, Inc. (SNWV)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
| Date of Report (Date of earliest event reported) | November 14, 2022 | |
|---|---|---|
| SANUWAVE Health, Inc. | ||
| --- | ||
| (Exact name of registrant as specified in its charter) | ||
| Nevada | 000-52985 | 20-1176000 |
| --- | --- | --- |
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
| 11495 Valley View Road, Eden Prairie, Minnesota | 55344 | |
| --- | --- | |
| (Address of principal executive offices) | (Zip Code) | |
| Registrant’s telephone number, including area code | (770) 419-7525 | |
| --- | --- | |
| N/A | ||
| --- | ||
| (Former name or former address, if changed since last report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| N/A | N/A | N/A |
Indicate by check mark whether the registration is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 | Results of Operations and Financial Condition. |
|---|
On November 14, 2022, SANUWAVE Health, Inc., a Nevada Corporation (the “Company”), issued a press release announcing its financial results for the third quarter ended September 30, 2022. As previously announced, a business update via conference call will occur on November 15, 2022, at 9:00 am EST. Materials are provided on the Company website www.sanuwave.com/investors.
On August 14, 2022, the Company announced its financial results for the second quarter ended June 30, 2022. A copy of the press release is attached as Exhibit 99.2 to this Current Report on Form 8-K.
The information in this Item 2.02 of this Current Report on Form 8-K and the exhibits attached hereto shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
| Item 9.01 | Financial Statements and Exhibits. |
|---|---|
| (d) | Exhibits. |
| --- | --- |
| Exhibit<br><br> <br>No. | Description |
| --- | --- |
| 99.1 | Press Release dated November 14, 2022 |
| 99.2 | Press Release dated August 14, 2022 |
| 104 | Cover Page Interactive Data File––the cover page XBRL tags are embedded within the Inline XBRL document. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| SANUWAVE HEALTH, INC. | ||
|---|---|---|
| Dated: November 15, 2022 | By: | /s/ Toni Rinow |
| Name: | Toni Rinow | |
| Title: | Chief Financial Officer |
Exhibit 99.1
FOR IMMEDIATE RELEASE
CONTACT:
Kevin Richardson, II
Chief Executive Officer
Investors@Sanuwave.com
SANUWAVE Announces Q3 earnings
EDEN PRARIE, MN, November 14, 2022 (GLOBE NEWSWIRE) -- via NewMediaWire – SANUWAVE Health, Inc. (OTCPK: SNWV), a leading provider of next-generation FDA-approved wound care products, today announced 3^rd^ quarter results.
For the three-months and nine-months ended September 30, 2022:
| • | Revenues increased 12% to $4.2 million for the 3 months ended September 30, 2022, versus $3.7 million for the same period last year. |
|---|---|
| • | Revenue for the nine-months ended September 30, 2022, totaled approximately $11.2 million versus $8.7 million for the same period in the prior year, an increase of 28.5%. |
| --- | --- |
| • | Gross margin also improved period over period to 85% from 58% a year ago and to 77% versus 58% for the nine-months ended September 30, 2022. |
| --- | --- |
| • | Operating loss continued to decrease from the prior year. Operating loss for the three-months ended September 30, 2022, totaled $1.8 million as compared to the prior year at<br> $3.4 million. Operating expense for the nine-months ended September 30, 2022, totaled $13.9 million, a decrease of 17.6% over the same period in the prior year. |
| --- | --- |
Mr. Kevin Richardson, CEO, stated, “We are very pleased with third quarter results which showed revenue growth year on year despite ongoing capacity constraints. Our focus is increasing sales at an accelerated rate as we ramp up capacity during the fourth quarter and into 2023. We have also decreased our operating expenses over the past year to a level where we can achieve profitable growth.”
“As a result of our efforts to improve profitability and manage our expenses, the company is pleased to announce that it became EBITDA positive in the month of October and expects to continue this for Q4 as a whole.”
Subsequent to the end of the quarter, the company raised an additional approximately $2 million in order to maximize flexibility around sales hiring and inventory build. Terms were consistent with the August financing. This cash is not reflected in the Q3 statements.
As previously announced a business update will occur via conference call on November 15, 2022. Materials for the conference call at 9:00 a.m. EST are included on the company website, www.sanuwave.com/investors.
Telephone access is available by dialing the following numbers:
Conference ID: 13734492
Toll-Free: 1-877-407-0784
Toll/International: 1-201-689-8560
A replay will be available through November 29, 2022, shortly after conclusion of the event.
About SANUWAVE
SANUWAVE Health is focused on the research, development, and commercialization of its patented, non-invasive and biological response-activating medical systems for the repair and regeneration of skin, musculoskeletal tissue, and vascular structures.
SANUWAVE’s end-to-end wound care portfolio of regenerative medicine products and product candidates help restore the body’s normal healing processes. SANUWAVE applies and researches its patented energy transfer technologies in wound healing, orthopedic/spine, aesthetic/cosmetic, and cardiac/endovascular conditions.
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.
CONTACT:
Kevin Richardson, II
Chief Executive Officer
Investors@Sanuwave.com
SANUWAVE HEALTH, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In thousands, except share data)
| December 31, 2021 | |||||
|---|---|---|---|---|---|
| ASSETS | |||||
| Current Assets: | |||||
| Cash | 1,112 | $ | 619 | ||
| Accounts receivable, net of allowance for doubtful accounts of 0.8 million, respectively | 2,403 | 2,415 | |||
| Inventory | 1,413 | 1,040 | |||
| Prepaid expenses and other current assets | 1,935 | 326 | |||
| Total Current Assets | 6,863 | 4,400 | |||
| Property, Equipment and Other, net | 673 | 1,118 | |||
| Other Intangible Assets, net | 5,313 | 5,841 | |||
| Goodwill | 7,260 | 7,260 | |||
| Total Assets | 20,109 | $ | 18,619 | ||
| LIABILITIES | |||||
| Current Liabilities: | |||||
| Senior secured promissory note payable, in default | 12,773 | $ | 11,586 | ||
| Convertible promissory notes payable, in default | 4,000 | 11,601 | |||
| Convertible promissory notes, related parties, in default | 1,373 | 1,596 | |||
| Convertible promissory notes payable | 9,174 | - | |||
| Convertible promissory notes payable, related parties | 4,485 | - | |||
| Advances on future cash receipts | 194 | 446 | |||
| Accounts payable | 5,055 | 7,644 | |||
| Accrued expenses | 4,100 | 4,394 | |||
| Accrued employee compensation | 3,792 | 4,247 | |||
| Due under factoring ageement | 1,510 | 1,737 | |||
| Warrant liability | 1,196 | 9,614 | |||
| Current portion of SBA loans | - | 158 | |||
| Accrued interest | 3,988 | 2,521 | |||
| Accrued interest, related parties | 546 | 289 | |||
| Current portion of lease and contract liabilities | 249 | 316 | |||
| Other | 30 | 114 | |||
| Total Current Liabilities | 52,465 | 56,263 | |||
| Non-current Liabilities | |||||
| SBA loans | - | 875 | |||
| Lease liabilities | 263 | 118 | |||
| Contract liabilities | 205 | 293 | |||
| Deferred tax liability | 28 | 28 | |||
| Total Non-currrent Liabilities | 496 | 1,314 | |||
| Total Liabilities | 52,961 | 57,577 | |||
| Commitments and Contingencies (Footnote 11) | |||||
| STOCKHOLDERS' DEFICIT | |||||
| Preferred Stock, par value 0.001, 5,000,000 shares authorized;<br> 6,175 shares Series A, 293 shares Series B, 90 shares Series C and 8 shares Series D<br> <br> no shares issued and outstanding at September 30, 2022 and December 31, 2021 | - | - | |||
| Common Stock, par value 0.001, 800,000,000 shares authorized; 548,737,651 and 481,619,621<br> issued and outstanding at September 30, 2022 December 31, 2021, respectively | 549 | 482 | |||
| Additional Paid-in Capital | 152,750 | 144,582 | |||
| Accumulated Deficit | (186,084 | ) | (183,949 | ) | |
| Accumulated Other Comprehensive Loss | (67 | ) | (73 | ) | |
| Total Stockholders' Deficit | (32,852 | ) | (38,958 | ) | |
| Total Liabilities and Stockholders' Deficit | 20,109 | $ | 18,619 |
All values are in US Dollars.
The accompanying notes to condensed consolidated financial statement are an integral part of these financial statements.
SANUWAVE HEALTH, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
(In thousands, except share data)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |||||||||
| Revenues: | ||||||||||||
| Accessory and parts revenue | $ | 3,012 | $ | 2,067 | $ | 7,866 | $ | 5,645 | ||||
| Product | 902 | 1,299 | 2,408 | 2,066 | ||||||||
| Rental Income | 247 | 333 | 935 | 864 | ||||||||
| License fees and other | 5 | 26 | 33 | 175 | ||||||||
| Total Revenue | 4,166 | 3,725 | 11,242 | 8,750 | ||||||||
| Cost of Revenues | 606 | 1,555 | 2,590 | 3,658 | ||||||||
| Gross Margin | 3,560 | 2,170 | 8,652 | 5,092 | ||||||||
| Operating Expenses: | ||||||||||||
| General and administrative | 3,404 | 2,864 | 8,482 | 8,909 | ||||||||
| Selling and marketing | 1,650 | 2,150 | 5,037 | 6,450 | ||||||||
| Research and development | 157 | 297 | 494 | 923 | ||||||||
| Gain on disposal of assets | - | - | (690 | ) | - | |||||||
| Depreciation and amortization | 189 | 194 | 575 | 585 | ||||||||
| Total Operating Expenses | 5,400 | 5,505 | 13,898 | 16,867 | ||||||||
| Operating Loss | (1,840 | ) | (3,335 | ) | (5,246 | ) | (11,775 | ) | ||||
| Other Income (Expense): | ||||||||||||
| Interest expense | (3,301 | ) | (1,781 | ) | (9,203 | ) | (4,340 | ) | ||||
| Interest expense, related party | (439 | ) | (55 | ) | (551 | ) | (150 | ) | ||||
| Change in fair value of derivative liabilities | 5,252 | 1,555 | 16,597 | 1,599 | ||||||||
| Loss on issuance of debt | - | (1,088 | ) | (3,434 | ) | (3,572 | ) | |||||
| Gain / (loss) on extinguishment of debt | (86 | ) | 460 | (297 | ) | 460 | ||||||
| Gain / (loss) on foreign currency exchange | 1 | (2 | ) | (1 | ) | 2 | ||||||
| Other Income (Expense), net | 1,427 | (911 | ) | 3,111 | (6,001 | ) | ||||||
| Net Loss before Income Taxes | (413 | ) | (4,246 | ) | (2,135 | ) | (17,776 | ) | ||||
| Provision for Income Taxes | - | 6 | - | 28 | ||||||||
| Net Loss | (413 | ) | (4,252 | ) | (2,135 | ) | (17,804 | ) | ||||
| Other Comprehensive Loss | ||||||||||||
| Foreign currency translation adjustments | - | - | - | (12 | ) | |||||||
| Total Comprehensive Loss | $ | (413 | ) | $ | (4,252 | ) | $ | (2,135 | ) | $ | (17,816 | ) |
| Loss per Share: | ||||||||||||
| Basic and Diluted | $ | (0.00 | ) | $ | (0.01 | ) | $ | (0.00 | ) | $ | (0.03 | ) |
| Weighted average shares outstanding, basic and diluted | ||||||||||||
| Basic and Diluted | 561,069,625 | 518,310,781 | 542,484,779 | 518,370,156 |
The accompanying notes to condensed consolidated financial
statements are an integral part of these financial statements.
SANUWAVE HEALTH, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In thousands)
| Nine Months Ended September 30, | ||||||
|---|---|---|---|---|---|---|
| 2022 | 2021 | |||||
| Cash Flows - Operating Acivities: | ||||||
| Net loss | $ | (2,135 | ) | $ | (17,804 | ) |
| Adjustments to reconcile net loss to net cash used by operating activities | ||||||
| Depreciation and Amortization | 681 | 970 | ||||
| Bad debt expense | 62 | 307 | ||||
| Income tax expense | - | 28 | ||||
| Shares issued for service | 888 | - | ||||
| Loss (Gain) on extinguishment of debt | 297 | (460 | ) | |||
| Gain on sale of property and equipment, net | (690 | ) | - | |||
| Change in fair value of derivative liabilities | (16,597 | ) | (1,599 | ) | ||
| Loss on issuance of debt | 3,434 | 3,572 | ||||
| Amortization of debt issuance costs and original issue discount | 2,998 | 1,418 | ||||
| Accrued interest | 1,618 | 929 | ||||
| Interest payable, related parties | 168 | 150 | ||||
| Changes in operating assets and liabilities | ||||||
| Accounts receivable - trade | 69 | (345 | ) | |||
| Inventory | (373 | ) | 1,430 | |||
| Prepaid expenses and other assets | (1,437 | ) | (355 | ) | ||
| Accounts payable | (1,863 | ) | 2,656 | |||
| Accrued expenses | 271 | 1,652 | ||||
| Accrued employee compensation | (473 | ) | 885 | |||
| Contract liabilties | (94 | ) | 60 | |||
| Net Cash Used in Operating Activities | (13,176 | ) | (6,506 | ) | ||
| Cash Flows - Investing Activities | ||||||
| Proceeds from sale of property and equipment | 1,022 | - | ||||
| Purchase of property and equipment | - | (441 | ) | |||
| Net Cash Flows Provided by (Used in) Investing Activities | 1,022 | (441 | ) | |||
| Cash Flows - Financing Activities | ||||||
| Proceeds from senior promissory notes | 2,940 | 940 | ||||
| Proceeds from short term notes | 640 | 125 | ||||
| Proceeds from factoring, net | (227 | ) | 1,244 | |||
| Proceeds from SBA loan | - | 1,033 | ||||
| Proceeds from warrant exercises | 100 | - | ||||
| Proceeds from convertible promissory notes | 12,366 | 1,928 | ||||
| Payments of principal on finance leases | (174 | ) | (143 | ) | ||
| Payments of principal on convertible promissory notes, related parties, convertible promissory notes and SBA loans | (2,981 | ) | (237 | ) | ||
| Net Cash Flows Provided by Financing Activities | 12,664 | 4,890 | ||||
| Effect of Exchange Rates on Cash | (17 | ) | (53 | ) | ||
| Net Change in Cash During Period | 493 | (2,110 | ) | |||
| Cash at Beginning of Period | 619 | 2,437 | ||||
| Cash at End of Period | $ | 1,112 | $ | 327 | ||
| Supplemental Information: | ||||||
| Cash paid for interest | $ | 3,345 | $ | 1,993 | ||
| Non-cash Investing and Financing Activities: | ||||||
| Reclassification of warrant liability due to cashless warrant exercise | $ | 2,166 | $ | 2,030 | ||
| Settlement of debt and warrants with stock | 1,361 | $ | - | |||
| Warrants issued in conjunction with senior secured promissory note payable | 2,654 | - | ||||
| Common shares issued in conjunction with senior secured promissory note payable | 3,720 | - | ||||
| Embedded conversion option with issuances of convertible debt | 2,309 | 2,740 | ||||
| Working capital balances refinanced into Convertible notes payable | 2,273 | - | ||||
| Warrant issuance in conjunction with convertible debt | 1,463 | 758 |
The accompanying notes to condensed consolidated financial statements are an integral part of these financial statements.
Exhibit 99.2
FOR IMMEDIATE RELEASE
SANUWAVE HEALTH REPORTS SECOND QUARTER 2022 FINANCIAL RESULTS & WILL HOST LIVE CONFERENCE CALL WITH BUSINESS UPDATE
Eden Prairie, MN, August 15, 2022 - SANUWAVE Health, Inc. (OTCPK: SNWV) a leading provider of next-generation wound care products, reported financial results for their second quarter, ending June 30, 2022, with the SEC on Friday, August 12, 2022. The Company will host a live conference call on Tuesday August 16, 2022, at 12:30 (EDT) to provide a business update (Dial-in information below).
Quarter Highlights:
| - | Over 50 systems placed to treat wounds |
|---|---|
| o | 100% increase from the 25 systems placed Q2 2021 |
| --- | --- |
| - | Over 40,000 wound treatments administered |
| --- | --- |
| o | Up from 31,000 treatments administered Q2 2021 |
| --- | --- |
| - | Successfully completed MDSAP audit |
| --- | --- |
| - | Transitioned company from Suwanee GA to Eden Prairie MN |
| --- | --- |
| - | Became current on SEC filings |
| --- | --- |
| - | Launched Cosmetic and Orthopedics verticals with initial sales in each |
| --- | --- |
“Our key ENERGY FIRST products, dermaPACE® and UltraMIST® continues to show strong acceptance and growth due to their robust clinical and financial profiles and increasingly attractive reimbursement, driven by a shift in payor focus to evidence based medicine in wound care.. As our devices ship and our footprint widens, it has allowed the company to build a high degree of recurring usage revenue. This effort has been hampered over the past year as the company has also spent significant time, effort on fixing our accounting implementation that did not go as planned. Disruption from this process flow issue led to late filings, which led to our issues on the OTC and pink sheets. It also had a significant financial impact as it drew attention and resources away from growth. That is in the past and as we sit today, we are now timely and current in our SEC filings and the excessive outside costs to fix the problem have abated, lowering our break-even point. The company is now positioned to focus on profitable growth as we capture the opportunity in the wound care space,” stated Kevin Richardson, CEO.
Exhibit 99.2
Quarter Financial Results
Revenues for the quarter, starting April 1, 2022 and ending June 30, 2022, came in at $3.9 million. An increase of $1 million or 33% when compared to the $ 2.9 million for the same period in 2021. The increased revenue was primarily driven from an increase in sales of the UltraMIST system. The company moved manufacturing from Georgia to Minnesota which impacted timing of international shipments resulting in a $100,000 reduction in international revenue year-over-year.
Gross Margin increased to 72% from 64% as cost of revenue remained flat. The improvements were driven due to product mix and more efficient customer service and shipping.
Operating loss was $2 million compared to $4 million in the year prior. The improvement is due to an increase in gross income and a reduction in sales, marketing, and R&D expenses.
Conference Call
SANUWAVE Health, Inc. will host a live conference call on Tuesday August 16, 2022, at 12:30 (EDT) to discuss recent business activity, provide an update on SEC filings, and detail strategic initiatives. A visual presentation accompaniment will be made available Tuesday morning via SANUWAVE’s website (https://sanuwave.com/about-us/news/).
Telephone access to the call will be available by dialing the following numbers:
Toll Free: 1-877-407-0784
International: 1-201-689-8560
A replay will be made available through August 30, 2022:
Toll Free: 1-844-512-2921
International: 1-412-317-6671
Replay Passcode: 13732361
About SANUWAVE
SANUWAVE Health is focused on the research, development, and commercialization of its patented, non-invasive and biological response-activating medical systems for the repair and regeneration of skin, musculoskeletal tissue, and vascular structures.
SANUWAVE’s ENERGY FIRST wound care portfolio consists of regenerative medicine products and product candidates help restore the body’s normal healing processes. SANUWAVE applies and researches its patented energy transfer technologies in wound healing, orthopedic/spine, aesthetic/cosmetic, and cardiac/endovascular conditions.
Exhibit 99.2
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.
MEDIA CONTACT:
Sabrina Ruelle
Senior Director, Marketing & Program Management
Sabrina.Ruelle@Sanuwave.com
INVESTOR RELATIONS CONTACT:
Kevin Richardson II
Chief Executive Officer
Investorrelations@Sanuwave.com
(FINANCIAL TABLES FOLLOW)
Exhibit 99.2
SANUWAVE HEALTH, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
(In thousands except share data)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |||||||||
| Revenues: | ||||||||||||
| Accessory and parts revenue | $ | 2,663 | $ | 2,008 | $ | 4,854 | $ | 3,579 | ||||
| Product | 862 | 514 | 1,507 | 767 | ||||||||
| Rental Income | 344 | 276 | 688 | 530 | ||||||||
| License fees and other | 13 | 111 | 28 | 149 | ||||||||
| Total Revenue | 3,882 | 2,909 | 7,077 | 5,025 | ||||||||
| Cost of Revenues | 1,096 | 1,048 | 1,986 | 2,103 | ||||||||
| Gross Margin | 2,786 | 1,861 | 5,091 | 2,922 | ||||||||
| Operating Expenses: | ||||||||||||
| General and administrative | 2,937 | 2,923 | 5,078 | 6,045 | ||||||||
| Selling and marketing | 1,672 | 2,520 | 3,387 | 4,300 | ||||||||
| Research and development | 171 | 272 | 337 | 626 | ||||||||
| Gain on disposal of assets | (136 | ) | - | (690 | ) | - | ||||||
| Depreciation and amortization | 210 | 192 | 386 | 391 | ||||||||
| Total Operating Expenses | 4,854 | 5,907 | 8,498 | 11,362 | ||||||||
| Operating Loss | (2,068 | ) | (4,046 | ) | (3,407 | ) | (8,440 | ) | ||||
| Other Income (Expense): | ||||||||||||
| Interest expense | (2,826 | ) | (1,437 | ) | (5,903 | ) | (2,559 | ) | ||||
| Interest expense, related party | (56 | ) | (48 | ) | (112 | ) | (95 | ) | ||||
| Change in fair value of derivative liabilities | 7,861 | (591 | ) | 11,343 | 44 | |||||||
| Loss on issuance of debt | - | (2,484 | ) | (3,434 | ) | (2,484 | ) | |||||
| Loss on extinguishment of debt | (211 | ) | - | (211 | ) | - | ||||||
| Gain / (loss) on foreign currency exchange | 2 | (3 | ) | 2 | 4 | |||||||
| Other Income (Expense), net | 4,770 | (4,563 | ) | 1,685 | (5,090 | ) | ||||||
| Net Loss before Income Taxes | 2,702 | (8,609 | ) | (1,722 | ) | (13,530 | ) | |||||
| Provision for Income Taxes | - | 6 | - | 22 | ||||||||
| Net Income (loss) | 2,702 | (8,615 | ) | (1,722 | ) | (13,552 | ) | |||||
| Other Comprehensive Income (Loss) | ||||||||||||
| Foreign currency translation adjustments | - | (3 | ) | - | (11 | ) | ||||||
| Total Comprehensive Income (Loss) | $ | 2,702 | $ | (8,618 | ) | $ | (1,722 | ) | $ | (13,563 | ) | |
| Gain (loss) per Share: | ||||||||||||
| Basic | $ | 0.01 | $ | (0.02 | ) | $ | (0.00 | ) | $ | (0.03 | ) | |
| Diluted | $ | 0.00 | $ | (0.02 | ) | $ | (0.00 | ) | $ | (0.03 | ) | |
| Weighted average shares outstanding, basic and diluted | ||||||||||||
| Basic | 538,560,051 | 518,310,781 | 532,589,825 | 518,400,008 | ||||||||
| Diluted | 871,984,091 | 518,310,781 | 532,589,825 | 518,400,008 |
The accompanying notes to condensed consolidated financial
statements are an integral part of these statements.
Exhibit 99.2
PART I -- FINANCIAL INFORMATION
| ITEM 1. | FINANCIAL STATEMENTS |
|---|
SANUWAVE HEALTH, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In thousands except share data)
| December 31, 2021 | |||||
|---|---|---|---|---|---|
| ASSETS | |||||
| Current Assets: | |||||
| Cash | 1,484 | $ | 619 | ||
| Accounts receivable, net of allowance for doubtful accounts of 0.8 million, respectively | 1,749 | 2,415 | |||
| Inventory | 925 | 1,040 | |||
| Prepaid expenses and other current assets | 1,181 | 326 | |||
| Total Current Assets | 5,339 | 4,400 | |||
| Property, Equipment and Other, net | 535 | 1,118 | |||
| Other Intangible Assets, net | 5,489 | 5,841 | |||
| Goodwill | 7,260 | 7,260 | |||
| Total Assets | 18,623 | $ | 18,619 | ||
| LIABILITIES | |||||
| Current Liabilities: | |||||
| Senior secured promissory note payable, in default | 12,334 | $ | 11,586 | ||
| Convertible promissory notes payable, in default | 6,523 | 11,601 | |||
| Convertible promissory notes, related parties, in default | 1,596 | 1,596 | |||
| Short-term loans | 1,484 | - | |||
| Advances on future cash receipts | 398 | 446 | |||
| Accounts payable | 7,083 | 7,644 | |||
| Accrued expenses | 5,900 | 4,394 | |||
| Accrued employee compensation | 4,264 | 4,247 | |||
| Due under factoring ageement | 1,792 | 1,737 | |||
| Warrant liability | 5,295 | 9,614 | |||
| Current portion of SBA loans | 272 | 158 | |||
| Accrued interest | 3,600 | 2,521 | |||
| Accrued interest, related parties | 402 | 289 | |||
| Current portion of lease liabilities | 185 | 268 | |||
| Current portion of contract liabilities | 64 | 48 | |||
| Other | 107 | 114 | |||
| Total Current Liabilities | 51,299 | 56,263 | |||
| Non-current Liabilities | |||||
| SBA loans | 761 | 875 | |||
| Lease liabilities | 40 | 118 | |||
| Contract liabilities | 295 | 293 | |||
| Deferred tax liability | 28 | 28 | |||
| Total Non-currrent Liabilities | 1,124 | 1,314 | |||
| Total Liabilities | 52,423 | 57,577 | |||
| Commitments and Contingencies (Footnote 11) | |||||
| STOCKHOLDERS' DEFICIT | |||||
| Preferred Stock, par value 0.001, 5,000,000 shares authorized; 6,175, 293, 90<br> and 8 shares designated Series A, Series B, Series C and Series D, respectively;<br> no shares issued and outstanding at March 31, 2022 and December 31, 2021 | - | - | |||
| Common Stock, par value 0.001, 800,000,000 shares authorized; 529,293,205 <br> and 481,619,621 issued and outstanding at June 30, 2022 December 31, 2021, respectively | 529 | 482 | |||
| Additional Paid-in Capital | 151,409 | 144,582 | |||
| Accumulated Deficit | (185,671 | ) | (183,949 | ) | |
| Accumulated Other Comprehensive Loss | (67 | ) | (73 | ) | |
| Total Stockholders' Deficit | (33,800 | ) | (38,958 | ) | |
| Total Liabilities and Stockholders' Deficit | 18,623 | $ | 18,619 |
All values are in US Dollars.
The accompanying notes to condensed consolidated financial
statements are an integral part of these statements.
Exhibit 99.2
SANUWAVE HEALTH, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In thousands)
| Six Months Ended June 30, | ||||||
|---|---|---|---|---|---|---|
| 2022 | 2021 | |||||
| Cash Flows - Operating Acivities: | ||||||
| Net income (loss) | $ | (1,722 | ) | $ | (13,552 | ) |
| Adjustments to reconcile net loss to net cash used by operating activities | ||||||
| Amortization of intangibles | 352 | 352 | ||||
| Depreciation | 94 | 198 | ||||
| Bad debt expense | 52 | 240 | ||||
| Income tax expense | - | 22 | ||||
| Shares issued for service | 888 | - | ||||
| Loss in extinguishment of debt | 211 | - | ||||
| Gain on sale of property and equipment, net | (541 | ) | - | |||
| Change in fair value of derivative liabilities | (11,343 | ) | (44 | ) | ||
| Loss on issuance of debt | 3,434 | 2,484 | ||||
| Amortization of debt issuance costs and original issue discount | 1,304 | 719 | ||||
| Accrued interest | 1,078 | 390 | ||||
| Interest payable, related parties | 112 | 95 | ||||
| Changes in operating assets and liabilities | ||||||
| Accounts receivable - trade | 733 | 218 | ||||
| Inventory | 115 | 521 | ||||
| Prepaid expenses | (855 | ) | (191 | ) | ||
| Other assets | 47 | (83 | ) | |||
| Accounts payable | (563 | ) | 1,475 | |||
| Accrued expenses | 1,408 | 1,350 | ||||
| Accrued employee compensation | 103 | 553 | ||||
| Contract liabilties | (108 | ) | 4 | |||
| Net Cash Used by Operating Activities | (5,201 | ) | (5,249 | ) | ||
| Cash Flows - Investing Activities | ||||||
| Proceeds from sale of property and equipment | 948 | - | ||||
| Purchase of property and equipment | - | (277 | ) | |||
| Net Cash Flows Used in Investing Activities | 948 | (277 | ) | |||
| Cash Flows - Financing Activities | ||||||
| Proceeds from senior promissory notes | 2,940 | 1,263 | ||||
| Proceeds from short term notes | 2,130 | 1,033 | ||||
| Proceeds from factoring | 55 | 1,038 | ||||
| Proceeds from warrant exercises | 100 | - | ||||
| Payments of principal on finance leases | (121 | ) | (94 | ) | ||
| Proceeds from related party advances | - | 125 | ||||
| Net Cash Flows Provided by Financing Activities | 5,104 | 3,365 | ||||
| Effect of Exchange Rates on Cash | 14 | (12 | ) | |||
| Net Change in Cash During Period | 865 | (2,173 | ) | |||
| Cash at Beginning of Period | 619 | 2,437 | ||||
| Cash at End of Period | $ | 1,484 | $ | 264 | ||
| Supplemental Information: | ||||||
| Cash paid for interest | $ | 2,045 | $ | 1,434 | ||
| Non-cash Investing and Financing Activities: | ||||||
| Reclassification of warrant liability due to cashless warrant exercise | $ | 2,167 | $ | 2,030 | ||
| Warrants issued in conjunction with senior secured promissory note payable | 2,654 | - | ||||
| Common shares issued in conjunction with senior secured promissory note payable | 3,720 | - | ||||
| Embedded conversion option with issuances of convertible debt | - | 2,740 | ||||
| Warrant issuance in conjunction with convertible debt | - | 758 |
The accompanying notes to condensed consolidated financial
statements are an integral part of these statements.