SOURCE: SANUWAVE Health, Inc.

SANUWAVE Health, Inc.

August 14, 2017 17:00 ET

SANUWAVE Health Reports Second Quarter Financial Results and Provides a Business Update

SUWANEE, GA--(Marketwired - Aug 14, 2017) - SANUWAVE Health, Inc. (OTCQB: SNWV), today reported financial results for the three and six months ended June 30, 2017 and provided a business update. The Company will host a conference call at 10:30AM Eastern Time on Tuesday, August 15, 2017. 

Highlights of the second quarter and recent weeks:

  • The Company appointed Dr. Maj-Britt Kaltoft to its Board of Directors. Dr. Kaltoft currently heads the business development and patent functions at the Danish State Serum Institute, an institution under the Danish Ministry of Health. 

  • The Company appointed retired Colonel Dr. Patrick Sesto to its Medical and Science Advisory Board. Dr. Sesto served 27 years active duty in the US Army and during that time was appointed by Major General Peake, US Army Surgeon General, to be his Consultant for Army Podiatry, a position he held for seven years. 

  • SANUWAVE signed a third amendment with HealthTronics, Inc. to extend the due date of its two promissory notes from January 31, 2018 to December 31, 2018.

  • SANUWAVE entered into a Memorandum of Understanding with eKare, Inc. to develop novel wound care analysis and management solutions. Linking SANUWAVE's dermaPACE wound treatment device with eKare's inSight® 3D wound imaging and analytics system, the two companies will strive to produce the industry's most comprehensive wound management solution.

  • SANUWAVE appointed LITHOMED to act as distributors for the orthopedic products in Taiwan. LITHOMED has a wealth of experience within this specific indication in Taiwan as well as access and relationships with key opinion leaders which will prove to be of immense value for market development.

  • SANUWAVE appointed Alat Medika Indonesia as distributor for dermaPACE® and liaison for clinical trials participation for their wound care product in Indonesia. It is well known that diabetes and related concerns need to be addressed within Indonesia and having access to outstanding technology such as SANUWAVE's within the country is a positive step.

  • SANUWAVE appointed Interventional Concepts, Inc. to act as Territory Sales Manager for sourcing and screening of potential distributors for the Company's products in Columbia. Interventional Concepts will give SANUWAVE access to a multidisciplinary team of life science professionals in Columbia that provide regulatory and commercial support when introducing SANUWAVE's products.

"The second quarter came in below plan but we remain confident we will achieve our seven goals for 2017 and as you can see we make great progress toward reaching these goals," stated Kevin Richardson, CEO and Chairman. "The seven goals that we projected for 2017 were:

1. FDA approval in late 2017 or early 2018,
2. Add 7 to 10 new countries/regions to our portfolio,
3. Expand Board of Directors members from 4 to 7,
4. Expand Medical Advisory Board members from 2 to 5,
5. Produce record international sales,
6. Launch clinical work both domestically and internationally, and
7. Obtain at least one non-medical partner.

If we can achieve these goals in 2017, we will be well prepared for a rapid sales increase in 2018 as our commercialization efforts take effect," concluded Mr. Richardson.

Second Quarter Financial Results

Revenues for the three months ended June 30, 2017 were $111,045, compared to $203,406 for the same period in 2016, a decrease of $92,361, or 45%. Revenues resulted primarily from sales in Europe, Asia and Asia/Pacific of our orthoPACE device and related applicators. The decrease in revenues for 2017 was due to lower sales of new orthoPACE devices and applicators in Europe and Asia/Pacific in 2017.

Research and development expenses for the three months ended June 30, 2017 were $437,909, compared to $476,167 for the same period in 2016, a decrease of $38,258, or 8%. Research and development expenses decreased in 2017 due to lower payments to consultants related to the de novo petition submission to the FDA in July 2016 and lower travel costs. This was partially offset by non-cash stock compensation expense for stock options issued in June 2017.

General and administrative expenses for the three months ended June 30, 2017 were $951,908, as compared to $589,896 for the same period in 2016, an increase of $362,012, or 61%. The increase in general and administrative expenses was due non-cash stock compensation expense for stock options issued in June 2017, tradeshow attendance in Europe and related travel expenses and increase in bad debt reserve.

Net loss for the three months ended June 30, 2017 was $1,415,937, or ($0.01) per basic and diluted share, compared to a net loss of $1,122,123, or ($0.01) per basic and diluted share, for the same period in 2016, an increase in the net loss of $293,814, or 26%. The increase in the net loss for 2017 was primarily due to the stock compensation expense for stock options issued during in June 2017 and an increase in the bad debt reserve and was partially offset by lower research and development expenses as noted above.

Six Months Ended June 30, 2017 Financial Results

Revenues for the six months ended June 30, 2017 were $260,614, compared to $472,730 for the same period in 2016, a decrease of $212,116, or 45%. Revenues resulted primarily from sales in Europe, Asia and Asia/Pacific of our orthoPACE device and related applicators. The decrease in revenues for 2017 was due to lower sales of new orthoPACE devices and applicators and lower applicator refurbishments in Europe and Asia/Pacific in 2017. 

Research and development expenses for the six months ended June 30, 2017 were $698,247, compared to $786,122 for the same period in 2016, a decrease of $87,875, or 11%. Research and development expenses decreased in 2017 as a result of lower payments to consultants related to the de novo petition submission to the FDA in July 2016, which was partially offset by higher audit costs related to ISO certification and non-cash stock compensation expense for stock option issued in June 2017.

General and administrative expenses for the six months ended June 30, 2017 were $1,400,514, as compared to $1,089,028 for the same period in 2016, an increase of $311,486, or 29%. The increase in general and administrative expenses was due to non-cash stock compensation expense for stock options issued in June 2017, tradeshow attendance in Europe and related travel expenses and increase in bad debt reserve.

Net loss for the six months ended June 30, 2017 was $1,909,469, or ($0.01) per basic and diluted share, compared to a net loss of $2,846,699, or ($0.03) per basic and diluted share, for the same period in 2016, a decrease in the net loss of $937,230, or 33%. The decrease in the net loss for 2017 was primarily due to a gain on the warrant valuation and lower operating expenses as noted above.

Conference Call

The Company will also host a conference call on Tuesday, August 15, 2017, beginning at 10:30AM Eastern Time to discuss the second quarter financial results, provide a business update and answer questions. Shareholders and other interested parties can participate in the conference call by dialing 866-682-6100 (U.S.) or 862-255-5401 (international) or via webcast at
 http://www.investorcalendar.com/event/19907

A replay of the conference call will be available beginning two hours after its completion through August 29, 2017, by dialing 877-481-4010 (U.S.) or 919-882-2331 (international) and entering Conference ID 19907.

About SANUWAVE Health, Inc.
SANUWAVE Health, Inc. (OTCQB: SNWV) (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 is currently under the FDA's de novo petition 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 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.

               
SANUWAVE HEALTH, INC. AND SUBSIDIARIES  
CONDENSED CONSOLIDATED BALANCE SHEETS  
(UNAUDITED)  
               
               
      June 30,     December 31,  
      2017     2016  
ASSETS            
CURRENT ASSETS                
  Cash and cash equivalents   $ 62,069     $ 133,571  
  Accounts receivable, net of allowance for doubtful accounts     191,932       460,799  
  Inventory, net     198,778       231,953  
  Prepaid expenses     95,741       87,823  
  TOTAL CURRENT ASSETS     548,520       914,146  
                 
PROPERTY AND EQUIPMENT, at cost, less accumulated depreciation     64,860       76,938  
                 
OTHER ASSETS     13,977       13,786  
  TOTAL ASSETS   $ 627,357     $ 1,004,870  
                 
LIABILITIES                
CURRENT LIABILITIES                
  Accounts payable   $ 1,188,459     $ 712,964  
  Accrued expenses     470,585       375,088  
  Accrued employee compensation     65,154       64,860  
  Advances from related parties     421,690       -  
  Interest payable, related parties     388,095       109,426  
  Short term loan, net     100,000       47,440  
  Warrant liability     816,521       1,242,120  
  Notes payable, related parties, net     5,369,361       5,364,572  
  TOTAL LIABILITIES     8,819,865       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; 139,099,843 and 137,219,968 issued and outstanding in 2017 and 2016, respectively    
139,100
     
137,220
 
                 
ADDITIONAL PAID-IN CAPITAL     93,077,145       92,436,697  
                 
ACCUMULATED DEFICIT     (101,342,917 )     (99,433,448 )
                 
ACCUMULATED OTHER COMPREHENSIVE LOSS     (65,836 )     (52,069 )
  TOTAL STOCKHOLDERS' DEFICIT     (8,192,508 )     (6,911,600 )
  TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT   $ 627,357     $ 1,004,870  
                   
   
SANUWAVE HEALTH, INC. AND SUBSIDIARIES  
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS  
(UNAUDITED)  
   
    Three Months Ended     Three Months Ended     Six Months Ended     Six Months Ended  
    June 30,     June 30,     June 30,     June 30,  
    2017     2016     2017     2016  
                         
REVENUES   $ 111,045     $ 203,406     $ 260,614     $ 472,730  
                                 
COST OF REVENUES (exclusive of depreciation and amortization shown below)     24,695       77,988       79,839       151,169  
                                 
OPERATING EXPENSES                                
  Research and development     437,909       476,167       698,247       786,122  
  General and administrative     951,908       589,896       1,400,514       1,089,028  
  Depreciation     5,958       837       12,078       1,673  
  Amortization     -       76,689       -       153,378  
  Gain on sale of property and equipment     -       -       -       (1,000 )
    TOTAL OPERATING EXPENSES     1,395,775       1,143,589       2,110,839       2,029,201  
                                 
    OPERATING LOSS     (1,309,425 )     (1,018,171 )     (1,930,064 )     (1,707,640 )
                                 
OTHER INCOME (EXPENSE)                                
  Gain (loss) on warrant valuation adjustment and conversion     35,410       28,250       358,633       (769,447 )
  Interest expense, net     (143,281 )     (129,334 )     (336,019 )     (363,764 )
  Gain (loss) on foreign currency exchange     1,359       (2,868 )     (2,019 )     (5,848 )
    TOTAL OTHER INCOME (EXPENSE), NET     (106,512 )     (103,952 )     20,595       (1,139,059 )
                                 
    NET LOSS     (1,415,937 )     (1,122,123 )     (1,909,469 )     (2,846,699 )
                                 
OTHER COMPREHENSIVE LOSS                                
  Foreign currency translation adjustments     (15,552 )     (5,684 )     (13,767 )     (2,713 )
    TOTAL COMPREHENSIVE LOSS   $ (1,431,489 )   $ (1,127,807 )   $ (1,923,236 )   $ (2,849,412 )
                                 
LOSS PER SHARE:                                
  Net loss - basic and diluted   $ (0.01 )   $ (0.01 )   $ (0.01 )   $ (0.03 )
                                 
  Weighted average shares outstanding - basic and diluted     138,992,669       102,645,697       138,517,370       88,933,089  
                                   
   
SANUWAVE HEALTH, INC. AND SUBSIDIARIES  
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  
(UNAUDITED)  
             
    Six Months Ended     Six Months Ended  
    June 30,     June 30,  
    2017     2016  
             
CASH FLOWS FROM OPERATING ACTIVITIES                
Net loss   $ (1,909,469 )   $ (2,846,699 )
  Adjustments to reconcile net loss to net cash used by operating activities to net cash used by operating activities                
    Depreciation     12,078       1,673  
    Change in allowance for doubtful accounts     116,833       5,613  
    Amortization     -       153,378  
    Stock-based compensation - employees, directors and advisors     482,295       116,550  
    (Gain) loss on warrant valuation adjustment     (358,633 )     769,447  
    Amortization of debt discount     57,349       11,472  
    Amortization of debt issuance costs     -       87,548  
    Loss on conversion option of promissory note payable     -       75,422  
    Gain on sale of property and equipment     -       (1,000 )
    Changes in assets - (increase)/decrease                
      Accounts receivable - trade     152,034       (28,313 )
      Inventory     33,175       54,002  
      Prepaid expenses     (7,918 )     26,165  
      Other     (191 )     (45 )
    Changes in liabilities - increase/(decrease)                
      Accounts payable     475,495       (50,989 )
      Accrued expenses     95,497       (63,551 )
      Accrued employee compensation     294       167,397  
      Interest payable, related parties     278,669       (131,579 )
      Promissory notes, accrued interest     -       (77,615 )
    NET CASH USED BY OPERATING ACTIVITIES     (572,492 )     (1,731,124 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES                
    Proceeds from sale of property and equipment     -       1,000  
    NET CASH PROVIDED BY INVESTING ACTIVITIES     -       1,000  
                 
CASH FLOWS FROM FINANCING ACTIVITIES                
    Proceeds from warrant exercise     93,067       -  
    Advances from related parties     421,690       -  
    Proceeds from 2016 Public Offering, net     -       1,596,855  
    Proceeds from convertible promissory notes, net     -       106,000  
    NET CASH PROVIDED BY FINANCING ACTIVITIES     514,757       1,702,855  
                 
EFFECT OF EXCHANGE RATES ON CASH     (13,767 )     (2,713 )
                 
    NET DECREASE IN CASH AND CASH EQUIVALENTS     (71,502 )     (29,982 )
                 
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD     133,571       152,930  
    CASH AND CASH EQUIVALENTS, END OF PERIOD   $ 62,069     $ 122,948  
                 
SUPPLEMENTAL INFORMATION                
    Cash paid for interest, related parties   $ -     $ 392,516  
                     

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