ALPHARETTA, Ga., Aug. 8, 2012 (GLOBE NEWSWIRE) -- SANUWAVE Health, Inc. (OTCBB:SNWV) today reported financial results for the three and six months ended June 30, 2012 and provided a business update.
Christopher M. Cashman, President and CEO of SANUWAVE, said, "I am very pleased with this quarter's growth in revenues which is a direct reflection of our efforts to further develop our distribution in international markets. The Company recognized the full extent of cost saving measures implemented in the first quarter of 2012, including headcount reductions and expense savings.We continue to make every effort to lower our cash burn to the maximum extent possible, while making sure we do not affect the value of the business, our ability to raise funds or pursue strategic options, or our capability to start up and conduct our next dermaPACE® study to treat diabetic foot ulcers. We continue to work with Canaccord Genuity Inc. and other specialized investment banking firms, as well as with high net worth current and potential investors, with the expectation of completing a capital raise in the third quarter of 2012."
Mr. Cashman continued, "As recently announced, the U.S. Food and Drug Administration (FDA) has granted conditional approval of our Investigational Device Exemption (IDE) Supplement to conduct an additional clinical trial utilizing our dermaPACE device in the treatment of diabetic foot ulcers. The FDA's decision is a highly positive development in the approval process of dermaPACE for the U.S. market. The planned trial provides a scientifically robust, yet potentially more expeditious, pathway to validation of dermaPACE's safety and efficacy and subsequent FDA approval. The Company has already identified clinical study sites and is in the process of qualifying and contracting with them for participation. Once appropriate funding to conduct the trial is in place, patient enrollment is expected to begin upon Institutional Review Board (IRB) approvals at each site. This is forecasted to occur as early as the fourth quarter of this year."
"We believe the clinical trial could be completed and submitted in support of a Premarket Approval (PMA) application for dermaPACE in as early as 20 months from trial initiation, assuming such data to be collected meets the agreed upon statistical and clinical plan of success. We remain focused on achieving FDA approval as soon as possible in order to make dermaPACE available to the millions of U.S. patients who suffer from debilitating, recalcitrant diabetic foot ulcers," concluded Mr. Cashman.
In the second quarter of 2012, preclinical research data from the Company's directed global development program, which addresses a diverse range of promising regenerative medicine applications for the PACE® technology platform in bone and soft tissue, were published in peer-reviewed journals:
- Harvard-MIT Division of Health Sciences and Technology and VA Boston Healthcare System investigators studied a novel approach for treatment of bone loss that demonstrated the ability of the Company's PACE technology to stimulate proliferation of periosteal adult stem cells (cambium cells) within the body and subsequently form bone.
- Chang Gung Memorial Hospital in Kaohsiung, Taiwan demonstrated the ability of the Company's PACE technology to prevent the onset of osteoarthritis for at least three months after a single treatment session.
- Heidelberg University Hospital demonstrated the ability of dermaPACE to improve skin flap survival after a tissue injury known as ischemia-reperfusion (IR) injury. A single treatment of dermaPACE delivered after tissue injury significantly improved skin flap survival and blood flow, suggesting potential benefits of dermaPACE across multiple microsurgical procedures.
Financial highlights for the three months ended June 30, 2012 include (all comparisons are with the three months ended June 30, 2011):
- Revenues increased by $46,608, or 28%, to $210,357 through increased sales through the Company's European distributors.
- Total operating expenses decreased by $922,250, or 39%, to $1,466,191. The Company recognized the full extent of cost saving measures implemented in the first quarter of 2012, including headcount reductions and expense savings.
- Net loss for the quarter decreased by $2,147,581, or 60%, to $1,424,626 from $3,572,207.
Second Quarter Financial ResultsRevenues for the three months ended June 30, 2012 were $210,357, compared with $163,749 for the same period in 2011, an increase of $46,608, or 28%. The increase in revenues is primarily due to increased sales of devices and refurbishment applicators to European distributors in 2012, as compared to 2011.
Research and development expenses for the three months ended June 30, 2012 were $347,644, compared with $795,118 for the same period in 2011, a decrease of $447,474, or 56%. Research and development expenses decreased in 2012 due to lower expenses for clinical results analysis and clinical related expenses. Consulting expenses related to clinical results analysis were higher in 2011 as the Company prepared to submit the dermaPACE PMA for treating diabetic foot ulcers to the FDA in June 2011.
General and administrative expenses for the three months ended June 30, 2012 were $1,036,728, compared with $1,510,390 for the same period in 2011, a decrease of $473,662, or 31%. General and administrative expenses included non-cash stock-based compensation of $239,870 and $147,762 for the three months ended June 30, 2012 and 2011, respectively. The increase in non-cash stock-based compensation was due to granting employee stock options in November 2011 and granting stock options to members of the Company's medical advisory board in March 2012. Excluding non-cash stock-based compensation, general and administrative expenses were $796,858 for the three months ended June 30, 2012, compared with $1,362,628 for the same period in 2011, a decrease of $565,770, or 42%. The decrease is primarily due to a reduction in headcount (18 employees in June 2012 as compared to 28 employees in June 2011), decreased investor relations expenses and decreased legal costs for patent defense activities.
The net loss for the three months ended June 30, 2012 was $1,424,626, or ($0.07) per share, compared with a net loss of $3,572,207, or ($0.17) per share, for the same period in 2011, a reduction in the net loss of $2,147,581, or 60%. The Company recorded a loss from extinguishment of debt of $1,318,781 in April 2011 as a result of the exchange of outstanding notes payable due to related parties for common stock and warrants.
First Half Financial ResultsRevenues for the six months ended June 30, 2012 were $448,897, compared to $415,502 for the same period in 2011, an increase of $33,395, or 8%. The increase in revenues is primarily due to increased sales of devices and refurbishment applicators to European distributors in 2012, as compared to 2011.
Research and development expenses for the six months ended June 30, 2012 were $951,441, compared with $1,544,417 for the same period in 2011, a decrease of $592,976, or 38%. Research and development expenses decreased in 2012 due to lower expenses for clinical results analysis and clinical related expenses. Consulting expenses related to clinical results analysis were higher in 2011 as the Company prepared to submit the dermaPACE PMA for treating diabetic foot ulcers to the FDA in June 2011.
General and administrative expenses for the six months ended June 30, 2012 were $2,274,268, compared with $2,892,575 for the same period in 2011, a decrease of $618,307, or 21%. General and administrative expenses included non-cash stock-based compensation of $502,046 and $300,210 for the six months ended June 30, 2012 and 2011, respectively. The increase in non-cash stock-based compensation was due to granting employee stock options in November 2011 and granting stock options to members of the Company's medical advisory board in March 2012. Excluding non-cash stock-based compensation, general and administrative expenses were $1,772,222 for the six months ended June 30, 2012, compared with $2,592,365 for the same period in 2011, a decrease of $820,143, or 32%. The decrease is mainly due to a reduction in headcount (18 employees in June 2012 as compared to 28 employees in June 2011), decreased investor relations expenses and decreased legal costs for patent defense activities.
The net loss for the six months ended June 30, 2012 was $3,259,941, or ($0.16) per share, compared with a net loss of $5,755,533, or ($0.31) per share, for the same period in 2011, a reduction of $2,495,592, or 43%. The Company recorded a loss from extinguishment of debt of $1,318,781 in April 2011 as a result of the exchange of outstanding notes payable due to related parties for common stock and warrants.
As of June 30, 2012, the Company had cash and cash equivalents of $1,400,875, compared with $3,909,383 as of December 31, 2011, a decrease of $2,508,508. For the six months ended June 30, 2012 and 2011, net cash used by operating activities was $2,504,284 and $5,003,056, respectively, primarily consisting of compensation costs, research and development activities and general corporate operations. The decrease in the use of cash for operating activities of $2,498,772 for 2012, as compared to the same period for 2011, was due to reductions in headcount, operating expenses and clinical expenses in 2012 as well as a reduction in current liabilities in 2011. Net cash provided (used) by financing activities for the six months ended June 30, 2012 and 2011 was $(2,245) and $12,367,455, respectively, which in 2011 consisted of the net proceeds from the private placement of $8,467,121 and the exercise of unit options of $3,900,334.
Conference CallSANUWAVE management will host an investment community conference call beginning at 11:00 a.m. Eastern time on Thursday, August 9, 2012 to discuss the second quarter financial results and to provide a business update and answer investor questions.
Shareholders and other interested parties can participate in the conference call by dialing 877-403-3959 (U.S. and Canada) or 706-902-0367 (international) and entering Conference ID 17958215.
A replay of the conference call will be available beginning two hours after its completion through August 17, 2012 by dialing 800-585-8367 (U.S. and Canada) or 404-537-3406 (international) and entering Conference ID 17958215.
About SANUWAVE Health, Inc.SANUWAVE Health, Inc. (www.sanuwave.com) is an emerging regenerative medicine company focused on the development and commercialization of noninvasive, biological response activating devices for the repair and regeneration of tissue, musculoskeletal and vascular structures. SANUWAVE's portfolio of products and product candidates activate biologic signaling and angiogenic responses, including new vascularization and microcirculatory improvement, helping to restore the body's normal healing processes and regeneration. SANUWAVE intends to apply its 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 and has Canadian device license approval for the treatment of the skin and subcutaneous soft tissue. 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.
Forward-Looking StatementsThis 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 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|
|June 30,||December 31,|
|Cash and cash equivalents||$ 1,400,875||$ 3,909,383|
|Accounts receivable - trade, net||58,545||81,565|
|Due from Pulse Veterinary Technologies, LLC||--||27,837|
|TOTAL CURRENT ASSETS||1,979,814||4,578,044|
|PROPERTY AND EQUIPMENT, at cost, less accumulated depreciation||41,811||51,206|
|INTANGIBLE ASSETS, at cost, less accumulated amortization||1,380,404||1,533,782|
|TOTAL ASSETS||$ 3,405,169||$ 6,166,224|
|Accounts payable||$ 449,894||$ 756,657|
|Accrued employee compensation||951,854||632,333|
|Interest payable, related parties||80,968||81,864|
|Capital lease payable, current portion||4,751||4,576|
|Liabilities related to discontinued operations||655,061||655,061|
|TOTAL CURRENT LIABILITIES||2,321,368||2,321,074|
|Notes payable, related parties||5,372,743||5,372,743|
|Capital lease payable, non-current portion||6,464||8,884|
|TOTAL NON-CURRENT LIABILITIES||5,379,207||5,381,627|
|COMMITMENTS AND CONTINGENCIES||--||--|
|PREFERRED STOCK, par value $0.001, 5,000,000 shares authorized; no shares issued and outstanding||--||--|
|COMMON STOCK, par value $0.001, 150,000,000 shares and 50,000,000 shares authorized in 2012 and 2011, respectively; 20,907,536 issued and outstanding in 2012 and 2011||20,908||20,908|
|ADDITIONAL PAID-IN CAPITAL||63,443,023||62,940,977|
|ACCUMULATED OTHER COMPREHENSIVE INCOME||9,432||10,466|
|TOTAL STOCKHOLDERS' DEFICIT||(4,295,406)||(1,536,477)|
|TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT||$ 3,405,169||$ 6,166,224|
|SANUWAVE HEALTH, INC. AND SUBSIDIARIES|
|CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS|
|Three Months Ended||Three Months Ended||Six Months Ended||Six Months Ended|
|June 30,||June 30,||June 30,||June 30,|
|REVENUES||$ 210,357||$ 163,749||$ 448,897||$ 415,502|
|COST OF REVENUES||82,161||47,233||153,933||140,531|
|Research and development||347,644||795,118||951,441||1,544,417|
|General and administrative||1,036,728||1,510,390||2,274,268||2,892,575|
|TOTAL OPERATING EXPENSES||1,466,191||2,388,441||3,389,427||4,602,851|
|OTHER INCOME (EXPENSE)|
|Extinguishment of debt||--||(1,318,781)||--||(1,318,781)|
|Interest expense, net||(80,446)||(79,794)||(159,302)||(316,074)|
|Loss on foreign currency exchange||(6,185)||(14,207)||(6,176)||(17,798)|
|Transitional services provided to Pulse Veterinary Technologies, LLC||--||112,500||--||225,000|
|TOTAL OTHER INCOME (EXPENSE)||(86,631)||(1,300,282)||(165,478)||(1,427,653)|
|LOSS BEFORE INCOME TAXES||(1,424,626)||(3,572,207)||(3,259,941)||(5,755,533)|
|INCOME TAX EXPENSE||--||--||--||--|
|OTHER COMPREHENSIVE INCOME (LOSS)|
|Foreign currency translation adjustments||(5,962)||2,290||(1,034)||13,288|
|TOTAL COMPREHENSIVE LOSS||$ (1,430,588)||$ (3,569,917)||$ (3,260,975)||$ (5,742,245)|
|LOSS PER SHARE:|
|Net loss - basic||$ (0.07)||$ (0.17)||$ (0.16)||$ (0.31)|
|Net loss - diluted||$ (0.07)||$ (0.17)||$ (0.16)||$ (0.31)|
|Weighted average shares outstanding - basic||20,907,536||20,537,517||20,907,536||18,340,586|
|Weighted average shares outstanding - diluted||20,907,536||20,537,517||20,907,536||18,340,586|
|SANUWAVE HEALTH, INC. AND SUBSIDIARIES|
|CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS|
|Six Months Ended||Six Months Ended|
|June 30,||June 30,|
|CASH FLOWS FROM OPERATING ACTIVITIES|
|Net loss||$ (3,259,941)||$ (5,755,533)|
|Adjustments to reconcile net loss to net cash used by operating activities:|
|Change in allowance for doubtful accounts||(34,534)||19,751|
|Extinguishment of debt||--||1,318,781|
|Changes in assets - (increase)/decrease|
|Accounts receivable - trade||57,554||(25,045)|
|Due from Pulse Veterinary Technologies, LLC||27,837||(53,619)|
|Changes in liabilities - increase/(decrease)|
|Accrued employee compensation||319,521||(786,173)|
|Interest payable, related parties||(896)||(2,009)|
|NET CASH USED BY OPERATING ACTIVITIES||(2,504,284)||(5,003,056)|
|CASH FLOWS FROM INVESTING ACTIVITIES|
|Purchase of property and equipment||(945)||(21,425)|
|NET CASH USED BY INVESTING ACTIVITIES||(945)||(21,425)|
|CASH FLOWS FROM FINANCING ACTIVITIES|
|Proceeds from private placement||--||8,467,121|
|Proceeds from unit options exercised, related parties||--||2,463,008|
|Proceeds from unit options exercised||--||1,437,326|
|Payment of principal on capital lease||(2,245)||--|
|NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES||(2,245)||12,367,455|
|EFFECT OF EXCHANGE RATES ON CASH||(1,034)||13,288|
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS||(2,508,508)||7,356,262|
|CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD||3,909,383||417,457|
|CASH AND CASH EQUIVALENTS, END OF PERIOD||$ 1,400,875||$ 7,773,719|
|Cash paid for interest, related parties||$ 161,936||$ 161,935|
|Cash paid for capital lease interest||$ 472||$ --|
|NON-CASH INVESTING AND FINANCING ACTIVITIES|
|Capital stock issued in exchange for notes payable, related parties||$ --||$ 4,413,908|
SANUWAVE Health, Inc. Barry Jenkins, 678-578-0103 Chief Financial Officer or Bernie Laurel, 678-578-0103 VP of Sales and Marketing