SANUWAVE Announces Q3 Earnings

Rhea-AI Summary

SANUWAVE Health, Inc. (OTCPK: SNWV) reported a 12% revenue increase to $4.2 million for Q3 2022, compared to $3.7 million in Q3 2021. Year-to-date revenue surged 28.5% to approximately $11.2 million. Gross margin improved significantly to 85% for Q3, up from 58% last year. Operating loss decreased to $1.8 million from $3.4 million in the prior year, with operating expenses down 17.6% to $13.9 million for nine months. The company achieved EBITDA positivity in October, indicating potential for sustained profitable growth.

Positive

• 12% revenue growth for Q3 2022, totaling $4.2 million.
• Year-to-date revenue increased by 28.5% to approximately $11.2 million.
• Gross margin improved to 85% in Q3 from 58% year-over-year.
• Operating loss reduced to $1.8 million, down from $3.4 million.
• Operating expenses decreased by 17.6% over the nine-month period.
• Achieved EBITDA positivity in October 2022.

Negative

• None.

EDEN PRAIRIE, MN, Nov. 14, 2022 (GLOBE NEWSWIRE) -- via NewMediaWire – SANUWAVE Health, Inc. (OTCPK: SNWV), a leading provider of next-generation FDA-approved wound care products, today announced 3rd 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 $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 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.

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				8,482				2,864				8,482				8,909
	Selling and marketing				5,037				2,150				5,037				6,450
	Research and development				494				297				494				923
	Gain on disposal of assets				(690	)			-				(690	)			-
	Depreciation and amortization				575				194				575				585
Total Operating Expenses					13,898				5,505				13,898				16,867
Operating Loss					(10,338	)			(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					(8,911	)			(4,246	)			(2,135	)			(17,776	)
Provision for Income Taxes					-				6				-				28
Net Loss					(8,911	)			(4,252	)			(2,135	)			(17,804	)
Other Comprehensive Loss
	Foreign currency translation adjustments				-				-				-				(12	)
Total Comprehensive Loss				$	(8,911	)		$	(4,252	)		$	(2,135	)		$	(17,816	)
Loss per Share:
	Basic and Diluted			$	(0.02	)		$	(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 BALANCE SHEETS
		(UNAUDITED)
		(In thousands, except share data)
					September 30, 2022				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;
	6,175 shares Series A, 293 shares Series B, 90 shares Series C and 8 shares Series D					-				-
	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
	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
The accompanying notes to condensed consolidated financial statement are an integral part of these financial statements.

FAQ

What were SANUWAVE Health's Q3 2022 revenues?

SANUWAVE Health reported revenues of $4.2 million for Q3 2022, a 12% increase compared to $3.7 million in Q3 2021.

What is the year-to-date revenue for SANUWAVE Health as of September 30, 2022?

The year-to-date revenue for SANUWAVE Health reached approximately $11.2 million, representing a 28.5% increase year-over-year.

What is the gross margin for SANUWAVE Health in Q3 2022?

The gross margin for SANUWAVE Health improved to 85% in Q3 2022, up from 58% a year ago.

How much did SANUWAVE Health reduce its operating loss in Q3 2022?

SANUWAVE Health decreased its operating loss to $1.8 million in Q3 2022 from $3.4 million in the previous year.

Did SANUWAVE Health achieve EBITDA positivity?

Yes, SANUWAVE Health became EBITDA positive in October 2022 and expects to maintain this for Q4.