SUWANEE, Ga., March 29, 2018 (GLOBE NEWSWIRE) -- SANUWAVE Health, Inc. (OTCQB:SNWV) reported financial results for the year ended December 31, 2017 with the SEC on Thursday, March 29, 2018 and provided a business update. The Company will also host a conference call today, March 29, 2018 at 9:00 a.m. Eastern Time.
Highlights of 2017:
- Received de novo clearance from the FDA December 28, 2017 for use of the dermaPACE® System in treating Diabetic Foot Ulcers (DFU’s).
- Signed Brazilian JV with MundiMed worth north of $25 million in net present value during fourth quarter of 2017.
- International footprint expanded from 5 active countries to 10 during 2017.
- Hired André Mouton as Vice President of International Sales and Relations in February 2017.
- Added experienced international health care expert to the Board of Directors member Dr. Maj-Britt Kaltloff, Head of Business Development, Danish State Serum Institute, Danish Ministry of Health.
- Added Senior military doctor, Col. Pat Sesto (ret.) formally of the Charlie Norwood VA Hospital, Augusta, GA to the science advisory board.
- Hosted first annual SANUWAVE Symposium in December with over 20 representatives from 5 countries.
- Received three patents as follows:
-- US patent 9,522,011 titled “Shock Wave Applicator with Movable Electrode”
-- US patent 9,566,209 titled “Shock Wave Electrodes with Fluid Holes”
-- US patent 9,840,313 titled “Cleaning and Grooming Water Submerged Structures Using Acoustic Pressure Shock Waves”
- Launched numerous international clinical studies to support growth. These studies have been or will be published during 2018 and/or featured at various conferences.
- Launched the Blog “Shock This” which has gotten tremendous industry response. 2017 focus was on education of the shock wave.
- Exhibitor at MEDICA Conference and participated at SAWC (Symposium of Advanced Wound Care) spring and fall conferences.
With the recent FDA clearance, we can now begin to develop and implement a platform for rolling out the dermaPACE System for treating DFU’s in the US. We are taking a methodical approach to the roll out to ensure we will ultimately achieve our goal - The delivery of a dermaPACE System to any location in the US that will be treating DFU’s. This will enable the company to reach thousands of locations in the next few years. To be successful in this implementation the company is following a strategy that can support such growth. This will involve following our playbook for success:
- Developing relations with the Key Opinion Leaders (KOL’s) as we expand our clinical work
- Having the proper equipment financing in place
- Selecting the right partners to manage the various channels
- Continuing extensive clinical work to support the gold standard study that was part of the FDA approval
- Extending the number of wound indications beyond DFU
- Adding more wound care experience at the board of director and science advisor level
- Hiring the driven people in several key positions
- Developing a service driven culture that can meet the needs of the practitioners, payors, and patients
Internationally we have seen demand pick up since our FDA announcement. We anticipate adding at least four new countries this year with at least two being similar to the Brazilian deal in nature. Our presence at EWMA, with four podium presentations, will be a key part of our relaunching efforts in Europe and beyond. We will also begin to see the first shipments of devices to the Brazilian joint venture during 2018.
2017 was a year filled with milestones setting the stage for rapid growth in the wound care market. 2018 will be about building the proper base and game plan to implement and execute the growth needed to achieve our stated goal of a device anywhere and everywhere a DFU is treated.
2017 Financial Results
Year Ended December 31, 2017 Financial Results
Revenues for the year ended December 31, 2017 were $738,527, compared to $1,376,063 for the same period in 2016, a decrease of $637,536, or 46%. Revenue resulted primarily from sales in Europe, Asia, and Asia/Pacific of our orthoPACE devices and related applicators and upfront distribution fee from our Brazilian distribution agreement with MundiMed. The decrease in revenue for 2017 is primarily due to a decrease in sales of orthoPACE devices in Asia/Pacific and the European Community, as compared to the prior year, as well as lower sales of new and refurbished applicators.
Operating expenses for the year ended December 31, 2017 were $4,321,403, compared to $4,127,433 for the prior year, an increase of $193,970. Research and development expenses increased by $163,891, primarily as a result of costs associated with the responses to questions from the FDA regarding the dermaPACE de novo submission and hiring of an independent consultant to perform software updates. In addition, a medical device and separate technical audit was performed related to our ISO certification in 2017. General and administrative expenses increased by $331,030, primarily due to increase in cost associated with investor relations consultants, costs associated with symposium hosted in December 2017 and increased non-cash stock compensation related to stock option and stock warrants issued in 2017. These increases are partially offset by decrease in amortization expense of $306,756, as our intangible assets were fully amortized as of December 31, 2016.
Net loss for 2017 was $5,537,936, or ($0.04) per share, compared with a net loss of $6,439,040, or ($0.06) per share in 2016, which is a decrease in the net loss of $901,104, or 14%. The decrease in the net loss for 2017 was a result of decreased loss on warrant valuation that is partially offset by increase in operating expenses discussed above.
On December 31, 2017, the Company has cash and cash equivalents of $730,184 compared to $133,571 as of December 31, 2016, an increase of $596,613. For the years ended December 31, 2017 and 2016, net cash used by operating activities was $1,528,971 and $3,199,453, respectively, a decrease of $1,670,482, or 52%. The decrease was primarily due to increase in accounts receivable of $250,678 and in accounts payable and accrued expenses of $1,082,071. Net cash used by investing activities in 2017 was $0 as compared to net cash used by investing activities in 2016 of $8,770 from the purchase of property and equipment. Net cash provided by financing activities for the year ended December 31, 2017 was $2,117,298, which primarily consisted of the net proceeds from convertible promissory notes of $1,384,232, proceeds from related party line of credit of $370,000, proceeds from advances from related parties of $310,000 and proceeds from warrant exercises of $93,066. Net cash provided by financing activities for the year ended December 31, 2016 was $3,207,771, which primarily consisted of the net proceeds from 2016 Public Offering of $1,596,855, 2016 Private Placement of $1,528,200, and proceeds from warrant exercises of $67,466. Cash and cash equivalents increased by $596,613 for the year ended December 31, 2017 and cash and cash equivalents decreased by $19,359 for the year ended December 31, 2016.
Conference Call
The Company will host a conference call on Thursday, March 29, 2018, beginning at 9AM Eastern Time to discuss the 2017 financial results, provide a business update and answer questions.
Shareholders and other interested parties can participate in the conference call by dialing 877-407-8033 (U.S.) or 201-689-8033 (international) or via webcast at http://www.investorcalendar.com/event/27265.
A replay of the conference call will be available beginning two hours after its completion through April 5, 2018, by dialing 877-481-4010 (U.S.) and entering PIN 27265 and a replay of the webcast will be available at http://www.investorcalendar.com/event/27265 until June 29, 2018.
About SANUWAVE Health, Inc.
SANUWAVE Health, Inc. (www.sanuwave.com) is a shock wave 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 has received FDA’s de novo clearance 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 shock wave 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
| SANUWAVE HEALTH, INC. AND SUBSIDIARIES | |||||||||
| CONSOLIDATED BALANCE SHEETS | |||||||||
| December 31, 2017 and 2016 | |||||||||
| 2017 | 2016 | ||||||||
| ASSETS | |||||||||
| CURRENT ASSETS | |||||||||
| Cash and cash equivalents | $ | 730,184 | $ | 133,571 | |||||
| Accounts receivable, net of allowance for doubtful accounts | 152,520 | 460,799 | |||||||
| Inventory, net | 231,532 | 231,953 | |||||||
| Prepaid expenses | 90,288 | 87,823 | |||||||
| TOTAL CURRENT ASSETS | 1,204,524 | 914,146 | |||||||
| PROPERTY AND EQUIPMENT, net | 60,369 | 76,938 | |||||||
| OTHER ASSETS | 13,917 | 13,786 | |||||||
| TOTAL ASSETS | $ | 1,278,810 | $ | 1,004,870 | |||||
| LIABILITIES | |||||||||
| CURRENT LIABILITIES | |||||||||
| Accounts payable | $ | 1,496,523 | $ | 712,964 | |||||
| Accrued expenses | 673,600 | 375,088 | |||||||
| Accrued employee compensation | 1,680 | 64,860 | |||||||
| Advances from related and unrelated parties | 310,000 | - | |||||||
| Line of credit, related parties | 370,179 | - | |||||||
| Convertible promissory notes, net | 455,606 | - | |||||||
| Interest payable, related parties | 685,907 | 109,426 | |||||||
| Short term loan, net | - | 47,440 | |||||||
| Warrant liability | 1,943,883 | 1,242,120 | |||||||
| Notes payable, related parties, net | 5,222,259 | 5,364,572 | |||||||
| TOTAL CURRENT LIABILITIES | 11,159,637 | 7,916,470 | |||||||
| TOTAL LIABILITIES | 11,159,637 | 7,916,470 | |||||||
| COMMITMENTS AND CONTINGENCIES | |||||||||
| STOCKHOLDERS' DEFICIT | |||||||||
| PREFERRED STOCK, SERIES A CONVERTIBLE, par value $0.001, | |||||||||
| 6,175 authorized; 6,175 shares issued and 0 shares outstanding | |||||||||
| in 2017 and 2016 | - | - | |||||||
| PREFERRED STOCK, SERIES B CONVERTIBLE, par value $0.001, | |||||||||
| 293 authorized; 293 shares issued and 0 shares outstanding | |||||||||
| in 2017 and 2016, respectively | - | - | |||||||
| PREFERRED STOCK - UNDESIGNATED, par value $0.001, 4,993,532 | |||||||||
| shares authorized; no shares issued and outstanding | - | - | |||||||
| COMMON STOCK, par value $0.001, 350,000,000 shares authorized; | |||||||||
| 139,300,122 and 137,219,968 issued and outstanding in 2017 and | |||||||||
| 2016, respectively | 139,300 | 137,220 | |||||||
| ADDITIONAL PAID-IN CAPITAL | 94,995,040 | 92,436,697 | |||||||
| ACCUMULATED DEFICIT | (104,971,384 | ) | (99,433,448 | ) | |||||
| ACCUMULATED OTHER COMPREHENSIVE LOSS | (43,783 | ) | (52,069 | ) | |||||
| TOTAL STOCKHOLDERS' DEFICIT | (9,880,827 | ) | (6,911,600 | ) | |||||
| TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ | 1,278,810 | $ | 1,004,870 | |||||
| SANUWAVE HEALTH, INC. AND SUBSIDIARIES | ||||||||||
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||||||||||
| Years Ended December 31, 2017 and 2016 | ||||||||||
| 2017 | 2016 | |||||||||
| REVENUES | $ | 738,527 | $ | 1,376,063 | ||||||
| COST OF REVENUES (exclusive of depreciation and amortization shown below) | 241,970 | 565,129 | ||||||||
| OPERATING EXPENSES | ||||||||||
| Research and development | 1,292,531 | 1,128,640 | ||||||||
| General and administrative | 3,004,403 | 2,673,773 | ||||||||
| Depreciation | 24,069 | 19,858 | ||||||||
| Amortization | - | 306,756 | ||||||||
| Gain of sale of assets, property and equipment | - | (1,594 | ) | |||||||
| TOTAL OPERATING EXPENSES | 4,321,003 | 4,127,433 | ||||||||
| OPERATING LOSS | (3,824,446 | ) | (3,316,499 | ) | ||||||
| OTHER INCOME (EXPENSE) | ||||||||||
| Loss on warrant valuation adjustment and conversion | (568,729 | ) | (2,223,718 | ) | ||||||
| Interest expense, net | (1,139,711 | ) | (886,494 | ) | ||||||
| Loss on foreign currency exchange | (5,050 | ) | (12,329 | ) | ||||||
| TOTAL OTHER INCOME (EXPENSE), NET | (1,713,490 | ) | (3,122,541 | ) | ||||||
| NET LOSS | (5,537,936 | ) | (6,439,040 | ) | ||||||
| OTHER COMPREHENSIVE INCOME (LOSS) | ||||||||||
| Foreign currency translation adjustments | 8,286 | (18,907 | ) | |||||||
| TOTAL COMPREHENSIVE LOSS | $ | (5,529,650 | ) | $ | (6,457,947 | ) | ||||
| LOSS PER SHARE: | ||||||||||
| Net loss - basic and diluted | $ | (0.04 | ) | $ | (0.06 | ) | ||||
| Weighted average shares outstanding - basic and diluted | 138,838,602 | 107,619,869 | ||||||||
| SANUWAVE HEALTH, INC. AND SUBSIDIARIES | |||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
| Years Ended December 31, 2017 and 2016 | |||||||||
| 2017 | 2016 | ||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||
| Net loss | $ | (5,537,936 | ) | $ | (6,439,040 | ) | |||
| Adjustments to reconcile loss from continuing operations | |||||||||
| to net cash used by operating activities | |||||||||
| Amortization | - | 306,756 | |||||||
| Depreciation | 24,069 | 19,858 | |||||||
| Change in allowance for doubtful accounts | 57,601 | 26,233 | |||||||
| Stock-based compensation - employees, directors and advisors | 768,105 | 547,842 | |||||||
| Loss on warrant valuation adjustment | 568,729 | 2,223,718 | |||||||
| Amortization of debt issuance costs | 431,087 | 225,786 | |||||||
| Warrants issued for services | 182,856 | 186,410 | |||||||
| Amortization of debt discount | 110,247 | 31,514 | |||||||
| Stock issued for consulting services | 8,000 | 43,540 | |||||||
| Loss on conversion option of promissory notes payable | - | 75,422 | |||||||
| Stock issued with convertible debenture | - | 50,100 | |||||||
| Gain on sale of asset, property and equipment | - | (1,594 | ) | ||||||
| Changes in assets - (increase)/decrease | |||||||||
| Accounts receivable - trade | 250,678 | (412,578 | ) | ||||||
| Inventory | (7,079 | ) | (29,249 | ) | |||||
| Prepaid expenses | (2,465 | ) | 36,165 | ||||||
| Other | (131 | ) | (2,689 | ) | |||||
| Changes in liabilities - increase/(decrease) | |||||||||
| Accounts payable | 783,559 | 203,698 | |||||||
| Accrued expenses | 298,512 | 15,714 | |||||||
| Accrued employee compensation | (63,180 | ) | (176,682 | ) | |||||
| Accrued interest | 21,896 | - | |||||||
| Interest payable, related parties | 576,481 | (130,377 | ) | ||||||
| NET CASH USED BY OPERATING ACTIVITIES | (1,528,971 | ) | (3,199,453 | ) | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||
| Proceeds from sale of property and equipment | - | 1,594 | |||||||
| Purchases of property and equipment | - | (10,364 | ) | ||||||
| NET CASH USED BY INVESTING ACTIVITIES | - | (8,770 | ) | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||
| Proceeds from convertible promissory notes, net | 1,384,232 | 106,000 | |||||||
| Proceeds from line of credit, related party | 370,000 | - | |||||||
| Advances from related parties | 310,000 | - | |||||||
| Proceeds from warrant exercise | 93,066 | 67,466 | |||||||
| Proceeds from 2016 Public Offering, net | - | 1,596,855 | |||||||
| Proceeds from 2016 Private Offering, net | - | 1,528,200 | |||||||
| Proceeds from convertible debenture, net | - | 175,000 | |||||||
| Proceeds from short term loan | - | 100,000 | |||||||
| Payment of short term loan | (40,000 | ) | - | ||||||
| Payment of convertible promissory notes | - | (155,750 | ) | ||||||
| Payment of convertible debenture | - | (210,000 | ) | ||||||
| NET CASH PROVIDED BY FINANCING ACTIVITIES | 2,117,298 | 3,207,771 | |||||||
| EFFECT OF EXCHANGE RATES ON CASH | 8,286 | (18,907 | ) | ||||||
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 596,613 | (19,359 | ) | ||||||
| CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 133,571 | 152,930 | |||||||
| CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 730,184 | $ | 133,571 | |||||
| SUPPLEMENTAL INFORMATION | |||||||||
| Cash paid for interest, related parties | $ | - | $ | 630,549 | |||||
| NONCASH INVESTING AND FINANCING ACTIVITIES | |||||||||
| Stock issued with convertible debenture | $ | - | $ | 50,100 | |||||
| Stock issued for services | $ | 8,000 | $ | 43,540 | |||||
| Loss on warrant conversion to stock | $ | - | $ | 888,418 | |||||
| Beneficial conversion feature on convertible promissory notes | 820,681 | 66,331 | |||||||
| Beneficial conversion feature on convertible debenture | - | 124,900 | |||||||
| Beneficial conversion feature on convertible debt | $ | 820,681 | $ | 191,231 | |||||
| Warrants issued for services | $ | 182,856 | $ | 186,410 | |||||
| Warrants issued with convertible promissory note | $ | 620,748 | $ | - | |||||
| Warrants issued for short term loan | - | 58,400 | |||||||
| Warrants issued for debt | $ | 620,748 | $ | 58,400 | |||||