Full Press Release Details
| SANUWAVE Health, Inc. | Lippert/Heilshorn Associates | |
| Barry Jenkins, CFO | Anne Marie Fields | |
| Bernie Laurel, VP of Sales and Marketing | 212-838-3777 | |
| 678-578-0103 | afields@lhai.com |
HEALTH REPORTS THIRD QUARTER FINANCIAL RESULTS AND
PROVIDES BUSINESS UPDATE
Patient Follow-Up Completed in Phase III Trial of dermaPACE to Treat Diabetic Foot Ulcers
Top-Line Results Expected by Year End and PMA Filing in First Quarter 2011
ALPHARETTA, Ga. (November 12, 2010) SANUWAVE Health, Inc. (OTC BB: SNWV), an emerging medical
technology company focused on regenerative medicine, today reported financial results for the three
and nine months ended September 30, 2010 and provided a business update.
Christopher M. Cashman, President and CEO of SANUWAVE, said, We are especially pleased with the
progress we made in the third quarter as we advanced our strategic development plans in nearly
every facet of our business. Most significantly, we completed patient follow-up in our U.S.
pivotal Phase III clinical trial of dermaPACE to treat diabetic foot ulcers (DFU) and look forward
to announcing top-line study results by the end of the year. We also launched the orthoPACE
device in Europe for use in orthopedic, trauma and sports medicine indications. We continued to
publish and present data in support of PACE technology in a number of clinical settings and in
support of our underlying mechanism of action. These accomplishments keep us on track to advance
the commercial goals for our devices in wound care, orthopedics and aesthetic medicine.
Operational highlights of the third quarter 2010 and recent weeks include the:
Regarding next steps in the Company s pivotal Phase III clinical trial investigating dermaPACE for
the treatment of diabetic foot ulcers, Mr. Cashman said, We continue to be on track to report
top-line results in the fourth quarter of 2010, to file our Premarket Approval Application (PMA)
with the FDA no later than the first quarter of 2011, and, pending a favorable response from the
FDA, potentially launch dermaPACE in the United States in 2011. This action plan and timeline are
consistent with our previous reports and demonstrate our commitment to making dermaPACE available
as quickly as possible to the millions of people who could benefit from our innovative regenerative
Third Quarter Financial Results
SANUWAVE s financial results for the third quarter of 2010 reflect the Company s ongoing research
and development of PACE technology for the dermaPACE diabetic foot ulcer clinical trial, and
development work for orthopedic and aesthetic uses.
Revenues for the three months ended September 30, 2010 were $278,000, compared with $135,000 in the
corresponding 2009 quarter. The increase is primarily due to sales of orthoPACE devices and
applicators following the device s June 2010 launch in Europe.
Research and development costs for the three months ended September 30, 2010 were $1.0 million,
compared with $1.1 million for the same period in 2009. The decrease in 2010, compared with the
same period in 2009, was due to lower clinical site costs for the dermaPACE diabetic foot ulcer
clinical trial, as the number of active patients declined during the final follow-up phase in 2010.
General and administrative expenses for the three months ended September 30, 2010 were $1.4
million, compared with $1.5 million for the same period in 2009. The decrease in 2010, compared to
the same period in 2009, was due to one-time accounting and legal fees incurred in September 2009
for the reverse merger transaction, offset somewhat by higher non-cash stock compensation expense
in 2010, as compared with the same period in 2009, due to new grants of options and restricted
stock in September 2009 and January 2010 which are being expensed over the applicable vesting term.
The net loss for the third quarter of 2010 was $2.7 million, or $0.21 per share, compared with a
net loss of $2.7 million, or $0.24 per share, during the third quarter of 2009.
Nine Month Financial Results
Revenues for the nine months ended September 30, 2010 were $539,000, compared with $539,000 in the
corresponding 2009 period. Revenues are primarily from sales of devices and applicators in Europe
of the legacy Evotron device for orthopedic conditions and our new orthoPACE device for
orthopedic conditions introduced in June 2010.
Research and development costs for the nine months ended September 30, 2010 were $3.0 million,
compared with $2.7 million for the same period in 2009. The increase in 2010, compared with the
same period in 2009, was due to higher costs of the ongoing clinical trial of dermaPACE for
diabetic foot ulcers, as enrollment ended during the first quarter of 2010 and new consultants were
engaged to assist in the patient follow-up phase of the clinical trial.
General and administrative expenses for the nine months ended September 30, 2010 were $4.5 million,
compared with $3.4 million for the same period in 2009. The increase in 2010, compared to the same
period in 2009, was primarily due to increased non-cash stock compensation expense of $1.4 million
for the nine months ended September 30, 2010, compared to $0.6 million in the prior-year period,
due to new grants of options and restricted stock in September 2009 and January 2010 which are
being expensed over the applicable vesting term. In addition, the Company had higher bonus expense
accrued in 2010, as compared to the same period in 2009, offset somewhat by the additional one-time
accounting and legal fees incurred with the September 2009 reverse merger transaction.
The net loss for the nine months ended September 30, 2010 was $8.4 million, or $0.67 per share,
compared with a net loss of $3.5 million, or $0.31 per share, reported during the same period of
2009. The net loss for the nine months ended September 30, 2009 included income from discontinued
operations, net of tax, of $3.1 million from the sale of the Company s veterinary division in June
As of September 30, 2010 the Company had cash and cash equivalents of $393,000, compared with $1.8
million as of December 31, 2009. Net cash used by operations for the nine months ended September
30, 2010 was $4.1 million, compared with $5.2 million for the same period of 2009. The reduction
in the use of cash by operations in 2010, as compared to the same period in 2009, was primarily due
to the timing of accounts payable payments.
On September 30, 2010, in conjunction with an offering of securities (the Offering ) of the
Company pursuant to an exemption from registration under the Securities Act of 1933, as amended
(the Act ), the Company issued 150,000 Units to certain accredited investors, as that term is
defined in the Securities and Exchange Commission s (the SEC ) Rule 501 under the Act, for an
aggregate total purchase price of $300,000. Subsequent to quarter end, on October 1, 2010, in
conjunction with the Offering, the Company issued 250,000 Units to an accredited investor for
$500,000. Each Unit was sold to the new investors at a purchase price of $2.00 per Unit. Each
Unit in the Offering consists of: (i) one share of common stock, par value $0.001 per share (the
Common Stock ); (ii) a two-year common stock purchase warrant (the Class D Warrant ) to purchase
one share of Common Stock, at an exercise price of $2.00; and (iii) an option (the Option ), which
expires on December 31, 2010, to purchase the same number of Units as granted pursuant to this
transaction, at the purchase price of $2.00 per Unit.
For the nine months ended September 30, 2010, the Company issued ten promissory notes totaling
$2,450,000. Subsequent to quarter end, on October 12, 2010, the Company amended the terms of the
ten outstanding promissory notes such that the unpaid principal and interest on each note was
exchanged into the number of Units equal to (i) the unpaid principal and interest on each such
note, divided by (ii) 2. The unpaid principal and interest on the notes totaled $2,517,660, and
this sum was exchanged into a total of 1,258,830 Units.
PACE , defined as Pulsed Acoustic Cellular Expression, delivers high-energy acoustic pressure waves
to produce compressive and tensile stresses on cells and tissue structures to promote a positive
inflammatory response and quickly initiate the healing cascade. This results in revascularization
and microcirculatory improvement, including the production of angiogenic growth factors, enhanced
new blood vessel formation (angiogenesis), and the subsequent regeneration of tissue, such as skin,
musculoskeletal and vascular structures. PACE treatment triggers the initiation of the
inflammatory and proliferation phases of healing and subsequently returns a chronic
condition to an acute condition to help the body s own healing response to re-initiate.
About SANUWAVE Health, Inc.
Health, Inc. (www.sanuwave.com) is an emerging regenerative medicine company focused on
the development and commercialization of non-invasive, biological response activating devices for