SANUWAVE Health Reports Third Quarter 2020 Financial Results

 Transformational Acquisition Positions for Significant Growth in Fourth Quarter 2020 and Beyond

SUWANEE, GA, Nov. 17, 2020 (GLOBE NEWSWIRE) -- via NewMediaWire -- SANUWAVE Health, Inc. (OTCQB: SNWV), focused on the development and commercialization of a robust and innovative advanced wound care product portfolio for the repair and regeneration of skin and vascular structures, announced today financial results from the three months ended September 30, 2020.

Highlights of the Third Quarter and Recent Weeks

• Achieved record revenue of approximately $2.0 million in the third quarter of 2020;
• Closed the acquisition of UltraMIST and the license to market BIOVANCE and Interfyl from Celularity;
• Received regulatory approval from COFEPRIS and formed Joint Venture to market and distribute dermaPACE to treat chronic wounds in Mexico and received ANVISA approval to market dermaPACE to treat chronic wounds in Brazil;
• Participated in series of key medical meetings to enhance clinician awareness of dermaPACE and UltraMIST before audiences of leading wound care specialists;
• Received reimbursement coverage for BIOVANCE from largest Medicare/Medicaid Administrator; and
• Significantly strengthened patent portfolio.

Management Commentary
“The third quarter was transformational for SANUWAVE as we added UltraMist, BIOVANCE and Interfyl to our portfolio to create a market-leading provider of advanced wound care solutions that improves clinical outcomes across the continuum of care.  The combination of our two powerful wound care offerings was evidenced in our record revenue in the third quarter 2020; is expected to increase product revenue by approximately 50% in the fourth quarter; and should further accelerate our growth throughout 2021,” stated Kevin A. Richardson, II, Chairman and Chief Executive Officer of SANUWAVE Health.  “We are particularly pleased to have surpassed our integration timelines by three months and now have a cohesive team that is fully aligned and focused on achieving our goals to drive revenue and bring our suite of advanced wound care products to patients in need.” 

“Since closing the transaction in late August, we are off to a strong start and are pleased with the traction we are gaining in the market.  We continue to invest in having a strong presence at key medical conferences where we support the use dermaPACE and UltraMist before an audience of leading wound care clinicians.   In addition, we are now using data driven tools to pinpoint areas with the strongest addressable markets for our wound care solutions and are increasing our footprint in those geographies, where we are beginning to see the results of those initiatives.

“We expanded our geographic reach in Latin America with regulatory approvals for dermaPACE to treat chronic wounds in Mexico and Brazil.  Overall, international growth is expected to be strong with plans for nearly ten device placements in the fourth quarter. These placements should provide long-term recurring revenue as our partners gain traction through education and promotion of the clinical benefits of our advanced wound healing products in their respective regions,” concluded Mr. Richardson.

Third Quarter Financial Results

Revenues for the three months ended September 30, 2020 were $1,966,896, compared to $197,640 for the same period in 2019, an increase of $1,769,256, or 895%, which was primarily due to the acquisition of Celularity assets and licensing fees and international distribution fees, as compared to the prior year.

Cost of revenues for the three months ended September 30, 2020 were $548,406 compared to $122,923 for the same period in 2019. Gross profit as a percentage of revenues was 72% for the three months ended September 30, 2020, compared to 38% for the same period in 2019, primarily due to sales of UltraMist, BIOVANCE and Interfyl, which have a 60% gross profit and an increase in high-margin dermaPACE treatment fees.

Operating expenses for the three months ended September 30, 2020 were $7.2 million, compared to $2.5 million for the same period in 2019, an increase of $4.7 million, or 192%.

Research and development expenses for the three months ended September 30, 2020 were $432,155, compared to $299,903 for the same period in 2019, an increase of $132,252, or 44%, largely due to higher salary and related costs due to increased headcount as a result of the Celularity asset acquisition and Profile repackaging project in 2020.

Selling and marketing expenses for the three months ended September 30, 2020 were $1,373,475, compared to $335,472 for the same period in 2019, an increase of $1,038,003, or 309%, due to higher salary and related costs due to increased headcount as a result of the Celularity asset acquisition, higher commissions and higher costs for tradeshows.

General and administrative expenses for the three months ended September 30, 2020 were $5,054,508, as compared to $1,802,659 for the same period in 2019, an increase of $3,251,849, or 180%, due to increase in legal and consulting fees related to acquisition and increased operating costs such as utilities, rent, and IT services as a result of the acquisition.

Depreciation and amortization for the three months ended September 30, 2020 was $327,120, compared to $22,338 for the same period in 2019, an increase of $304,782 or 1,364%, due to goodwill recorded as a part of the acquisition and higher depreciation related to increase in fixed assets as a result of acquisition and leased dermaPACE devices.

Net loss for the three months ended September 30, 2020 was $6,181,9156, or ($0.02) per basic and diluted share, compared to a net loss of $2,748,018, or ($0.01) per basic and diluted share, for the same period in 2019, an increase in the net loss of $3,433,897, or 125%.

As of September 30, 2020, SANUWAVE Health had cash and cash equivalents of $5.4 million. Net cash provided by financing activities for the nine months ended September 30, 2020 was $35,615,857, which primarily consisted of $23,623,194 from private placement offerings, $13,346,547 from senior promissory notes, $2,450,000 proceeds from purchase of preferred stock, $1,100,000 from convertible notes, and $614,335 from SBA Loans. These proceeds were partially offset by debt payments of $5,457,663 and principal payments on financing leases of $114,806.  

About SANUWAVE Health, Inc.

SANUWAVE Health, Inc. (OTCQB:SNWV) (www.SANUWAVE.com) is focused on the research, development, and commercialization of its patented noninvasive and biological response activating medical systems for the repair and regeneration of skin, musculoskeletal tissue, and vascular structures.  Through its recent acquisition of Celularity’s UltraMIST assets, SANUWAVE now combines two highly complementary and market-cleared energy transfer technologies and two human tissue biologic products, which creates a platform of scale with an end-to-end product offering in the advanced wound care market. 

SANUWAVE’s portfolio of regenerative medicine products and product candidates activate tissue regeneration biological signaling and angiogenic responses, producing new vascularization and microcirculatory improvement combined with tissue growth which helps restore the body’s normal healing processes. SANUWAVE applies and researches its patented energy transfer technologies in wound healing, orthopedic/spine, plastic/cosmetic and cardiac/endovascular conditions.

For additional information about the Company, visit www. www sanuwave.com.

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:

SANUWAVE Health, Inc.
Kevin Richardson II
Chairman and Chief Executive Officer
978-922-2447
[e-mail]

Anne Marie Fields
Managing Director
Rx Communications Group
[e-mail]

-Tables to Follow-



		SANUWAVE HEALTH, INC. AND SUBSIDIARIES
		CONDENSED CONSOLIDATED BALANCE SHEETS
					September 30,		December 31,
					2020		2019
			ASSETS		(Unaudited)
CURRENT ASSETS
	Cash and cash equivalents				$                    5,391,591		$                    1,760,455
	Accounts receivable, net of allowance for doubtful accounts				1,395,815		75,543
	Inventory				2,539,475		542,955
	Prepaid expenses and other current assets				627,751		125,405
	TOTAL CURRENT ASSETS				9,954,632		2,504,358
PROPERTY AND EQUIPMENT, net					979,673		512,042
RIGHT OF USE ASSETS, net					442,197		323,661
OTHER INTANGIBLE ASSETS, net					14,198,799		-
GOODWILL					7,259,795		-
OTHER ASSETS					31,010		41,931
	TOTAL ASSETS				$                  32,866,106		$                    3,381,992
			LIABILITIES
CURRENT LIABILITIES
	Accounts payable				$                    2,322,192		$                    1,439,413
	Accrued expenses				1,603,543		1,111,109
	Accrued employee compensation				2,544,768		1,452,910
	Warrant liability				6,440,249		-
	Note payable				4,000,000		-
	Convertible promissory notes, related parties				1,596,254		-
	SBA loans				321,821		-
	Accrued interest				382,926		-
	Operating lease liability				251,372		173,270
	Finance lease liability				187,416		121,634
	Contract liabilities				65,037		66,577
	Notes payable, related parties, net				-		5,372,743
	Accrued interest, related parties				-		1,859,977
	Short term notes payable				-		587,233
	Line of credit, related parties				-		212,388
	Advances from related parties				-		18,098
	TOTAL CURRENT LIABILITIES				19,715,578		12,415,352
NON-CURRENT LIABILITIES
	Promissory note payable, net of debt issuance costs				12,007,526
	SBA loans				142,514
	Finance lease liability				284,588		271,240
	Operating lease liability				222,815		185,777
	Contract liabilities				45,519		573,224
	TOTAL NON-CURRENT LIABILITIES				12,702,962		1,030,241
	TOTAL LIABILITIES				32,418,540		13,445,593
COMMITMENTS AND CONTINGENCIES
			STOCKHOLDERS' DEFICIT
PREFERRED STOCK, par value $0.001, 5,000,000
	shares authorized; 6,175 and 293 shares designated Series A and				-		-
	Series B, respectively
COMMON STOCK, par value $0.001, 600,000,000 (Note 18) shares authorized;
	302,119,428 and 293,780,400 issued and outstanding in 2020 and
	2019, respectively				466,095		293,781
ADDITIONAL PAID-IN CAPITAL					143,086,771		115,457,808
ACCUMULATED DEFICIT					(143,043,935)		(125,752,956)
ACCUMULATED OTHER COMPREHENSIVE LOSS					(61,365)		(62,234)
	TOTAL STOCKHOLDERS' DEFICIT				447,566		(10,063,601)
	TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' DEFICIT				$                  32,866,106		$                    3,381,992

	SANUWAVE HEALTH, INC. AND SUBSIDIARIES
	CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
	(UNAUDITED)
				Three Months Ended		Three Months Ended		Nine Months Ended		Nine Months Ended
				September 30,		September 30,		September 30,		September 30,
				2020		2019		2020		2019
REVENUES
	Product			$                       1,321,248		$                          158,855		$                       1,465,147		$                          444,087
	License fees			629,447		16,250		639,447		189,307
	Other revenue			16,201		22,535		94,194		59,185
		TOTAL REVENUES		1,966,896		197,640		2,198,788		692,579
COST OF REVENUES
	Product			533,629		91,179		637,369		334,749
	Other			14,777		31,744		26,261		67,908
		TOTAL COST OF REVENUES		548,406		122,923		663,630		402,657
GROSS MARGIN				1,418,490		74,717		1,535,158		289,922
OPERATING EXPENSES
	Research and development			432,155		299,903		983,816		867,825
	Selling and marketing			1,373,475		335,472		2,414,476		901,031
	General and administrative			5,054,508		1,802,659		9,529,218		4,746,519
	Depreciation and amortization			327,120		22,338		491,891		40,150
		TOTAL OPERATING EXPENSES		7,187,258		2,460,372		13,419,401		6,555,525
		OPERATING LOSS		(5,768,768)		(2,385,655)		(11,884,243)		(6,265,603)
OTHER INCOME (EXPENSE)
	Gain on warrant valuation adjustment			865,916		-		865,916		227,669
	Loss on extinguishment of debt			(503,234)				(503,234)
	Interest expense			(690,659)		(182,001)		(831,348)		(1,120,440)
	Interest expense, related party			(61,334)		(175,522)		(431,070)		(508,193)
	Loss on foreign currency exchange			(23,836)		(4,840)		(32,103)		(13,199)
		TOTAL OTHER INCOME (EXPENSE), NET		(413,147)		(362,363)		(931,839)		(1,414,163)
		NET LOSS		(6,181,915)		(2,748,018)		(12,816,082)		(7,679,766)
OTHER COMPREHENSIVE INCOME (LOSS)
	Foreign currency translation adjustments			-		(14,061)		-		13,152
		TOTAL COMPREHENSIVE LOSS		$                     (6,181,915)		$                     (2,762,079)		$                   (12,816,082)		$                     (7,666,614)
LOSS PER SHARE:
	Net loss - basic and diluted			$                              (0.02)		$                              (0.01)		$                              (0.03)		$                              (0.04)
	Weighted average shares outstanding - basic and diluted			302,119,428		211,423,362		448,811,314		181,088,995