ALPHARETTA, Ga., May 17, 2016 (GLOBE NEWSWIRE) -- SANUWAVE Health, Inc. (OTCQB:SNWV), reported financial results for the three months ended March 31, 2016 and provided a business update on Monday, May 16, 2016.

Highlights of the first quarter and recent weeks:

  • Sales growth over prior year:  The Company recorded a revenue increase of $58,872 or 28% over the first quarter of 2015.  The increase is due to higher device sales and new applicators as well as higher refurbishments, especially with orthoPACE®.
     
  • Series A Warrant Exchange:  In January 2016, the Company entered into an agreement with certain beneficial owners of the outstanding Series A warrants to exchange those warrants for shares of the Company’s capital stock at a calculated exchange ratio of 1 Series A Warrant = 0.4685 shares of capital stock.  Through this agreement, 23,701,428 Series A Warrants were exchanged for 7,447,954 shares of Common Stock and 293 shares of Series B Convertible Preferred Stock.
     
  • Equity Offering:  The Company closed an equity offering with select accredited investors raising total gross proceeds of $1.8 million.  Through the equity offering the Company issued 30 million shares of common stock on a fully converted basis at a price of $0.06 per share and issued to the investors warrants to purchase up to 30 million shares of common stock at an exercise price of $0.08.   At the closing of the offering the Company issued Newport Coast Securities, Inc., the placement agent for the offering, 3,001,667 warrants to purchase shares of common stock at an exercise price of $0.08.  The warrants are immediately exercisable and have an expiration date of March 17, 2019.

“We have had a very busy first quarter, achieving all of the milestones we established in our fourth quarter business update,” stated Kevin A. Richardson, II, Chairman of the board of SANUWAVE.    “We achieved our revenue goals in both the fourth quarter of 2015 and the first quarter of 2016, executed the exchange offer to our Series A warrant holders and completed an equity offering.”

“As we look at the remainder of 2016 we will submit our data to the FDA for possible approval in the fourth quarter of 2016 or early in 2017, continue to search for a partner in a joint venture or partnership for commercialization of the product in 2016 and simultaneously plan for a launch of the product on our own.  We are also working on a number of other non-medical initiatives, which we will keep shareholders abreast of as they occur,” concluded Mr. Richardson.

First Quarter Financial Results

Revenues for the three months ended March 31, 2016 were $269,324, compared to $210,452 for the same period in 2015, an increase of $58,872, or 28%.  The increase in revenues for 2016 was due to higher sales of orthoPACE devices and applicators in Europe and Asia/Pacific.

Research and development expenses for the three months ended March 31, 2016 were $309,955, compared to $634,623 for the same period in 2015, a decrease of $324,668, or 51%.  Research and development expenses decreased in 2016 as a result of lower payments to third party clinical sites participating in the dermaPACE® clinical study as the patient enrollment was completed in 2015 and lower consulting related costs as the data results were also completed in 2015, this is partially offset by consulting expenses related to the pre-submission package to the FDA was completed in early 2016. 

General and administrative expenses for the three months ended March 31, 2016 were $499,132, as compared to $566,292 for the same period in 2015, a decrease of $67,160, or 12%.  The decrease in general and administrative expenses is primarily due to reduced salary and related costs as a result of reduction in headcount in July 2015 and is partially offset by higher professional and legal fees related to equity offering in 2016.

Net loss for the three months ended March 31, 2016 was $1,724,576, or ($0.02) per share, compared to a net loss of $1,159,115, or ($0.02) per share, for the same period in 2015, an increase in the net loss of $565,461, or 49%. The increase in the net loss was primarily due to the loss on warrant valuation related to the warrant conversion to stock in January 2016 and higher interest rates due to the amendment to notes payable, related parties completed in June 2015 and issuance of promissory notes in 2016.  These higher costs are partially offset by reduced operating expenses in 2016 discussed above.

Conference Call 
The Company hosted a conference call on Monday, May 16, 2016, to discuss the first quarter financial results, provide a business update and answer questions.  A replay of the conference call will be available through May 30, 2016, by dialing 877-660-6853 (U.S. and Canada) or 201-612-7415 (international) and entering Conference ID 414704.

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 is currently under the FDA’s Premarket Approval (PMA) 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.

(FINANCIAL TABLES FOLLOW)

SANUWAVE HEALTH, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
  (UNAUDITED)
        
        
     March 31, December 31,
     2016 2015
   ASSETS    
CURRENT ASSETS     
 Cash and cash equivalents  $604,135  $152,930 
 Accounts receivable, net of allowance for doubtful accounts  46,032   74,454 
 Inventory   258,495   284,908 
 Prepaid expenses   147,518   123,988 
 TOTAL CURRENT ASSETS   1,056,180   636,280 
        
PROPERTY AND EQUIPMENT, at cost, less accumulated depreciation  3,392   4,228 
        
OTHER ASSETS   11,191   11,097 
        
INTANGIBLE ASSETS, at cost, less accumulated amortization  230,067   306,756 
 TOTAL ASSETS  $1,300,830  $958,361 
        
   LIABILITIES    
CURRENT LIABILITIES     
 Accounts payable  $356,244  $509,266 
 Accrued expenses   252,003   359,374 
 Accrued employee compensation   286,155   241,542 
 Interest payable, related parties   182,968   239,803 
 Notes payable, related parties   5,353,806   - 
 Promissory notes payable   100,601   - 
 Warrant liability   122,800   138,100 
 TOTAL CURRENT LIABILITIES   6,654,577   1,488,085 
        
NON-CURRENT LIABILITIES     
 Notes payable, related parties   -   5,348,112 
 TOTAL LIABILITIES   6,654,577   6,836,197 
        
COMMITMENTS AND CONTINGENCIES (Note 12)    
        
   STOCKHOLDERS' DEFICIT    
PREFERRED STOCK, SERIES A CONVERTIBLE, par value $0.001,    
 6,175 authorized;  6,175 shares issued and 0 shares outstanding    
 in 2016 and 2015   -   - 
        
PREFERRED STOCK, SERIES B CONVERTIBLE, par value $0.001,    
 293 authorized;  293 shares issued and 293 and 0 shares outstanding    
 in 2016 and 2015, 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;    
 96,000,308 and 63,056,519 issued and outstanding in 2016 and    
 2015, respectively   96,000   63,057 
        
ADDITIONAL PAID-IN CAPITAL   89,299,427   87,086,677 
        
ACCUMULATED DEFICIT   (94,718,984)  (92,994,408)
        
ACCUMULATED OTHER COMPREHENSIVE LOSS  (30,190)  (33,162)
 TOTAL STOCKHOLDERS' DEFICIT   (5,353,747)  (5,877,836)
 TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $1,300,830  $958,361 
        

 

SANUWAVE HEALTH, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(UNAUDITED)
       
       
    Three Months Ended Three Months Ended
    March 31, March 31,
    2016
 2015
       
REVENUES $269,324  $210,452 
       
COST OF REVENUES  73,181   58,818 
       
  GROSS PROFIT  196,143   151,634 
       
OPERATING EXPENSES    
 Research and development  309,955   634,623 
 General and administrative  499,132   566,292 
 Depreciation  836   925 
 Amortization  76,689   76,689 
  TOTAL OPERATING EXPENSES  886,612   1,278,529 
       
  OPERATING LOSS  (690,469)  (1,126,895)
       
OTHER INCOME (EXPENSE)    
 Gain on sale of assets  1,000   - 
 Gain (loss) on warrant valuation adjustment  (797,697)  56,026 
 Interest expense, net  (154,187)  (79,344)
 Amortization of debt issuance costs  (74,549)  - 
 Amortization of debt discount  (5,694)  - 
 Loss on foreign currency exchange  (2,980)  (8,902)
  TOTAL OTHER EXPENSE  (1,034,107)  (32,220)
       
  NET LOSS  (1,724,576)  (1,159,115)
       
OTHER COMPREHENSIVE INCOME (LOSS)    
 Foreign currency translation adjustments  2,972   (12,718)
  TOTAL COMPREHENSIVE LOSS $(1,721,604) $(1,171,833)
       
LOSS PER SHARE:    
 Net loss - basic and diluted $(0.02) $(0.02)
       
 Weighted average shares outstanding - basic and diluted  75,220,485   62,931,250 
       

 

SANUWAVE HEALTH, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
       
    Three Months Ended Three Months Ended
    March 31, March 31,
    2016 2015
       
CASH FLOWS FROM OPERATING ACTIVITIES     
Net loss  $(1,724,576) $(1,159,115)
Adjustments to reconcile loss from continuing operations     
to net cash used by operating activities     
 Amortization   76,689   76,689 
 Depreciation   836   925 
 Change in allowance for doubtful accounts   1,052   2,346 
 Stock-based compensation - employees, directors and advisors   4,500   27,827 
 (Gain) Loss on warrant valuation adjustment   873,118   (56,026)
 Gain on sale of property and equipment   (1,000)  - 
 Amortization of debt issuance costs   74,549   - 
 Amortization of debt discount   5,694   - 
 Changes in assets - (increase)/decrease     
 Accounts receivable - trade   27,370   16,561 
 Inventory   26,413   5,012 
 Prepaid expenses   (23,530)  (19,172)
 Other   (94)  (80)
 Changes in liabilities - increase/(decrease)     
 Accounts payable   (153,022)  (27,492)
 Accrued expenses   (107,371)  (8,945)
 Accrued employee compensation   44,613   63,108 
 Interest payable, related parties   (56,835)  (1,792)
 Promissory notes - accrued interest   (79,948)  - 
 NET CASH USED BY OPERATING ACTIVITIES   (1,011,542)  (1,080,154)
       
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 2016 Equity Offering, net   1,352,775   - 
 Proceeds from convertible promissory notes, net   106,000   - 
 NET CASH PROVIDED BY FINANCING ACTIVITIES   1,458,775   - 
       
EFFECT OF EXCHANGE RATES ON CASH   2,972   (12,718)
       
 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS  451,205   (1,092,872)
       
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD   152,930   3,547,071 
 CASH AND CASH EQUIVALENTS, END OF PERIOD  $604,135  $2,454,199 
       
SUPPLEMENTAL INFORMATION     
 Cash paid for interest  $209,549  $81,864 
       
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

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