EX-99 2 snwv20130516_8kex99-1.htm EXHIBIT 99.1 snwv20130516_8kex99-1.htm

Exhibit 99.1

 

 

FOR IMMEDIATE RELEASE

 

 

SANUWAVE REPORTS FIRST QUARTER 2013 FINANCIAL RESULTS

 

ALPHARETTA, GA, May 14, 2013 – SANUWAVE Health, Inc. (OTCBB: SNWV) today reported financial results for the three months ended March 31, 2013 and provided a business update. The Company will host a conference call on Wednesday, May 15 at 10:00 a.m. Eastern Time.

 

“We are continuing to make strides in the approval process for our dermaPACE® device in the treatment of diabetic foot ulcers,” commented Joseph Chiarelli, Chief Executive Officer of SANUWAVE. “This past weekend, our Chief Medical Officer, Dr. Daniel Jorgensen, led an investigator meeting that was well-attended by representatives from 18 of the 20 clinical sites that will be participating in the pivotal supplemental trial. The enthusiasm shown by the meeting attendees illustrates the medical community’s interest in our technology and in participating in this important clinical study. With the clinical sites trained and ready to screen patients, we remain on-track to begin patient enrollment in the second quarter.”

 

Mr. Chiarelli continued, “In the first quarter, we focused on conserving our cash while identifying options to increase our financial position. Through the support of existing shareholders, we secured an aggregate $2.0 million in bridge financing, which was completed in March 2013. These shareholders provided additional funding in May 2013 via short-term promissory notes. We anticipate that these funds will be used for the pivotal supplemental clinical trial and general corporate purposes. We continue to work with our shareholders and other groups to secure the amount of funds essential to complete our dermaPACE supplemental trial and to achieve our goals.”

 

First Quarter Financial Results

Revenue for the three months ended March 31, 2013 was $201,234, compared with $238,540 for the same period in 2012, a decrease of $37,306, or 16%. Gross profit as a percentage of revenue was 72% for the three months ended March 31, 2013, as compared with 70% for the same period in 2012. The decrease in revenue is due to decreased sales of orthoPACE® devices primarily due to the European economic downturn. This is partially offset by an increase in sales of higher margin refurbishment applicators for devices due to the increased number of devices in use.

 

Operating expenses, including research and development expenses, for the three months ended March 31, 2013 were $1,278,286, compared with $1,923,236 for the same period in 2012, a decrease of $644,950, or 34%. The decrease in operating expenses was primarily due to a reduction in headcount (11 employees in March 2013 as compared to 22 employees in March 2012), the consolidation of our operations into one office effective November 2012 and a reduction of legal expenses related to patents. This was partially offset by additional expenses incurred in 2013 for financial advisors and other consultants.

 

Other income (expense) was a net expense of $4,236,470 for the three months ended March 31, 2013, compared with a net expense of $78,847 for the same period in 2012, an increase of $4,157,623. The increase was due to the issuance of the senior secured notes on March 8, 2013 and the resultant recording of a non-cash loss of $3,737,000 on the embedded conversion feature of the senior secured notes and the accrual of interest expense, including amortization of debt discount, on the senior secured notes of $428,467.

 

 
 

 

 

The net loss for the three months ended March 31, 2013 was $5,369,333, or ($0.25) per share, compared with a net loss of $1,835,315, or ($0.09) per share, for the same period in 2012, an increase in the net loss of $3,534,018, or 193%. The increase in the net loss was due to the issuance of the senior secured notes as discussed above which resulted in a non-cash non-operating charge of $3,737,000 and accrued interest expense, including amortization of debt discount, of $428,467.

 

As of March 31, 2013, the Company had cash and cash equivalents of $671,027, compared with $70,325 as of December 31, 2012, an increase of $600,702. For the three months ended March 31, 2013, net cash used by operating activities was $1,043,674, as compared with $1,490,445 for the same period in 2012, a decrease of $446,771, or 30%. The reduction in net cash used by operating activities in 2013 was primarily due to reductions in headcount, operating expenses and clinical expenses. Net cash provided (used) by financing activities for the three months ended March 31, 2013 and 2012 was $1,643,801 and $(1,112), respectively, which in 2013 consisted of the proceeds from the subscriptions payable for the senior secured notes of $1,570,000 and the proceeds from the subscription agreement with an affiliated shareholder of $75,000.

 

Conference Call

The Company will hold a conference call on Wednesday, May 15, 2013 beginning at 10:00 a.m. Eastern Time to discuss the first quarter 2013 financial results, provide a business update and to answer questions.

 

Shareholders and other interested parties can participate in the conference call by dialing 877-407-9055 (U.S. and Canada) or 201-493-6743 (international).

 

A replay of the conference call will be available beginning two hours after its completion through May 22, 2013 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 noninvasive, biological response activating devices for the repair and regeneration of tissue, musculoskeletal and vascular structures.  SANUWAVE’s portfolio of regenerative medicine 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 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 and 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.

 

Contact:

 

DC Consulting, LLC

407-792-3333

investorinfo@dcconsultingllc.com

 

SANUWAVE Health, Inc.
Barry Jenkins, 678-578-0103
Chief Financial Officer and COO
investorrelations@sanuwave.com


 



(FINANCIAL TABLES FOLLOW)

  

 
 

 

 

SANUWAVE HEALTH, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS


 

March 31,

December 31,

 

2013

2012

 

(Unaudited)

(Unaudited)

ASSETS

               

CURRENT ASSETS

               

Cash and cash equivalents

  $ 671,027   $ 70,325

Accounts receivable - trade, net

    93,461     87,826

Inventory

    261,282     292,665

Prepaid expenses

    116,406     128,495

TOTAL CURRENT ASSETS

    1,142,176     579,311
                 

PROPERTY AND EQUIPMENT, at cost, less accumulated depreciation

    27,851     32,842
                 

OTHER ASSETS

    11,233     11,358
                 

INTANGIBLE ASSETS, at cost, less accumulated amortization

    1,150,336     1,227,025

TOTAL ASSETS

  $ 2,331,596   $ 1,850,536
                 

LIABILITIES

               

CURRENT LIABILITIES

               

Accounts payable

  $ 359,029   $ 555,898

Accrued expenses

    623,311     721,916

Accrued employee compensation

    376,175     534,659

Derivative liability

    5,737,000     -

Senior secured convertible promissory notes

    436,983     -

Subscription payable for senior secured convertible promissory notes

    -     438,516

Interest payable, related parties

    80,071     81,864

Capital lease payable, current portion

    5,026     4,933

Liabilities related to discontinued operations

    655,061     655,061

TOTAL CURRENT LIABILITIES

    8,272,656     2,992,847
                 

NON-CURRENT LIABILITIES

               

Notes payable, related parties

    5,372,743     5,372,743

Capital lease payable, non-current portion

    2,659     3,951

TOTAL NON-CURRENT LIABILITIES

    5,375,402     5,376,694

TOTAL LIABILITIES

    13,648,058     8,369,541
                 

COMMITMENTS AND CONTINGENCIES

               
                 

STOCKHOLDERS' DEFICIT

               

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 authorized; 21,653,536 and 21,007,536 issued and outstanding in 2013 and 2012, respectively

    21,654     21,008
                 

ADDITIONAL PAID-IN CAPITAL

    64,935,348     64,357,193
                 

ACCUMULATED OTHER COMPREHENSIVE INCOME

    6,191     13,116
                 

ACCUMULATED DEFICIT

    (76,279,655 )     (70,910,322 )

TOTAL STOCKHOLDERS' DEFICIT

    (11,316,462 )     (6,519,005 )

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT

  $ 2,331,596   $ 1,850,536

 
 

 

 

SANUWAVE HEALTH, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(UNAUDITED)


 

Three Months Ended

Three Months Ended

 

March 31,

March 31,

 

2013

2012

                 

REVENUE

  $ 201,234   $ 238,540
                 

COST OF REVENUE

    55,811     71,772
                 

GROSS PROFIT

    145,423     166,768
                 

OPERATING EXPENSES

               

Research and development

    344,685     603,797

General and administrative

    851,921     1,237,540

Depreciation

    4,991     5,210

Amortization

    76,689     76,689

TOTAL OPERATING EXPENSES

    1,278,286     1,923,236
                 

OPERATING LOSS

    (1,132,863 )     (1,756,468 )
                 

OTHER INCOME (EXPENSE)

               

Loss on embedded conversion feature of Senior Secured Notes

    (3,737,000 )     -

Interest expense, net

    (508,890 )     (78,856 )

Gain on sale of fixed assets

    7,500     -

Gain on foreign currency exchange

    1,920     9

TOTAL OTHER INCOME (EXPENSE)

    (4,236,470 )     (78,847 )
                 

LOSS BEFORE INCOME TAXES

    (5,369,333 )     (1,835,315 )
                 

INCOME TAX EXPENSE

    -     -
                 

NET LOSS

    (5,369,333 )     (1,835,315 )
                 

OTHER COMPREHENSIVE LOSS

               

Foreign currency translation adjustments

    (6,925 )     4,928

TOTAL COMPREHENSIVE LOSS

  $ (5,376,258 )   $ (1,830,387 )
                 

LOSS PER SHARE:

               

Net loss - basic

  $ (0.25 )   $ (0.09 )

Net loss - diluted

  $ (0.25 )   $ (0.09 )
                 

Weighted average shares outstanding - basic

    21,278,128     20,907,536

Weighted average shares outstanding - diluted

    21,278,128     20,907,536

 

 
 

 

 

SANUWAVE HEALTH, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


 

Three Months Ended

Three Months Ended

 

March 31,

March 31,

 

2013

2012

                 

CASH FLOWS FROM OPERATING ACTIVITIES

               

Net loss

  $ (5,369,333 )   $ (1,835,315 )

Adjustments to reconcile net loss to net cash used by operating activities

               

Amortization

    76,689     76,689

Depreciation

    4,991     5,210

Change in allowance for doubtful accounts

    5,976     (2,520 )

Stock-based compensation - employees, directors and advisors

    317,601     262,176

Stock issued for consulting services

    186,200     -

Loss on embedded conversion feature of Senior Secured Notes

    3,737,000     -

Accrued interest on Senior Secured Notes

    428,467     -

Gain on sale of property and equipment

    (7,500 )     -

Changes in assets - (increase)/decrease

               

Accounts receivable - trade

    (11,611 )     (42,046 )

Inventory

    31,383     37,943

Prepaid expenses

    12,089     (8,730 )

Due from Pulse Veterinary Technologies, LLC

    -     27,837

Other

    125     (129 )

Changes in liabilities - increase/(decrease)

               

Accounts payable

    (196,869 )     (152,553 )

Accrued employee compensation

    (158,484 )     158,559

Accrued expenses

    (98,605 )     (15,773 )

Interest payable, related parties

    (1,793 )     (1,793 )

NET CASH USED BY OPERATING ACTIVITIES

    (1,043,674 )     (1,490,445 )
                 

CASH FLOWS FROM INVESTING ACTIVITIES

               

Sale of property and equipment

    7,500     -

Purchase of property and equipment

    -     (945 )

NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES

    7,500     (945 )
                 

CASH FLOWS FROM FINANCING ACTIVITIES

               

Proceeds from subscriptions payable for senior secured convertible promissory notes

    1,570,000     -

Proceeds from sale of capital stock - subscription agreement with related party

    75,000     -

Payments of principal on capital lease

    (1,199 )     (1,112 )

NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES

    1,643,801     (1,112 )
                 

EFFECT OF EXCHANGE RATES ON CASH

    (6,925 )     4,928
                 

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

    600,702     (1,487,574 )
                 

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

    70,325     3,909,383

CASH AND CASH EQUIVALENTS, END OF PERIOD

  $ 671,027   $ 2,421,809
                 

SUPPLEMENTAL INFORMATION

               

Cash paid for interest, related parties

  $ 81,864   $ 81,864

Cash paid for capital lease interest

  $ 160   $ 247