Full Press Release Details
SANUWAVE HEALTH REPORTS 2015 FinANCIAL RESULTS
AND PROVIDES A BUSINESS UPDATE
ALPHARETTA, GA, March 30, 2016 - SANUWAVE Health, Inc. (OTCBB: SNWV), today reported financial results for the year ended December 31, 2015 and provided a business update. The Company will host a conference call tomorrow, March 31, 2016, at 10:00 a.m. Eastern Time.
Highlights of 2015 and recent weeks:
"We realized a lot of positive accomplishments during 2015 such as ending the year with strong sales that continued into 2016, completing our Phase III supplemental clinical trial using dermaPACE for treating diabetic foot ulcers and expanding our patent portfolio" stated Kevin A. Richardson II, CEO and Chairman of the board of SANUWAVE. "We look forward working with the FDA to get our dermaPACE device approved for use in the United States."
2015 Financial Results
Year Ended December 31, 2015 Financial Results
Revenues for the year ended December 31, 2015 were $965,501, compared to $847,367 for the same period in 2014, an increase of $118,134, or 14%. Revenue resulted primarily from sales in Europe, Asia and Asia/Pacific of our dermaPACE and orthoPACE devices and related applicators. The increase in revenue for 2015 is primarily due to an increase in sales of orthoPACE devices in Asia/Pacific and the European Community, as compared to the prior year, as well as higher sales of new and refurbished applicators.
Operating expenses for the year ended December 31, 2015 were $5,118,317, compared to $6,590,882 for the prior year, a decrease of $1,472,565. Research and development expenses decreased by $827,988, primarily as a result of the dermaPACE clinical study incurring the more costly enrollment phase which was ongoing through 2014 and completed in early 2015. General and administrative expenses decreased by $533,904, primarily due to reduced cost of stock issued for consulting services as a result of less financial and investors relations consultants utilized in 2015 as compared to the prior year.
Net loss for the year ended December 31, 2015 was $4,810,285, or ($0.08) per basic and diluted share, compared to a net loss of $5,974,080, or ($0.12) per basic and diluted share, for the same period in 2014, a decrease in the net loss of $1,163,795, or 19%. The decrease in the net loss was primarily a result of decrease in operating expenses and gain on warrant valuation adjustment.
On December 31, 2015, the Company has cash and cash equivalents of $152,930 compared to $3,547,071 as of December 31, 2014, a decrease of $3,394,141. For the years ended December 31, 2015 and 2014, net cash used by operating activities was $3,473,456 and $6,678,369, respectively, a decrease of $3,204,913, or 48%. The decrease was primarily due to the decreased total operating expenses in 2015, as compared to 2014, of $1,372,565, the lower gain on warrant valuation in 2015, as compared to 2014, of $400,342 and the increase of accounts payable and accrued expenses in 2015 of $267,344. Net cash provided by investing activities in 2015 was $100,000 from the sale of assets held for sale. Net cash used by investing activities was $8,859 in 2014 from the purchase of property and equipment. Net cash provided by financing activities for the year ended December 31, 2014 was $10,071,149, which primarily consisted of the net proceeds from 2014 Private Placement of $8,562,500, net proceeds from sale of capital stock per the Subscription Agreement of $900,000, and proceeds from the 18% Convertible Promissory Notes of $815,000. There was no net cash provided by financing activities in 2015.
The Company will also host a conference call on Thursday, March 31, 2016, beginning at 10 a.m. Eastern Time to discuss the 2015 financial results, provide a business update and 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 April 15, 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.
SANUWAVE Health, Inc.
Chairman of the Board
(FINANCIAL TABLES FOLLOW)
| SANUWAVE HEALTH, INC. AND SUBSIDIARIES |
| CONSOLIDATED BALANCE SHEETS |
| December 31, 2015 and 2014 |
| 2015 | 2014 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | 152,930 | $ | 3,547,071 | ||||
| Accounts receivable, net of allowance for doubtful accounts | 74,454 | 86,404 | ||||||
| Inventory, net | 284,908 | 271,871 | ||||||
| Prepaid expenses | 123,988 | 128,550 | ||||||
| TOTAL CURRENT ASSETS | 636,280 | 4,033,896 | ||||||
| PROPERTY AND EQUIPMENT, at cost, less accumulated depreciation | 4,228 | 7,840 | ||||||
| OTHER ASSETS | 11,097 | 11,106 | ||||||
| INTANGIBLE ASSETS, at cost, less accumulated amortization | 306,756 | 613,513 | ||||||
| TOTAL ASSETS | $ | 958,361 | $ | 4,666,355 | ||||
| LIABILITIES | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable | $ | 509,266 | $ | 231,840 | ||||
| Accrued expenses | 359,374 | 369,456 | ||||||
| Accrued employee compensation | 241,542 | 2,226 | ||||||
| Interest payable, related parties | 239,803 | 81,864 | ||||||
| Notes payable, related parties | - | 5,372,743 | ||||||
| Warrant liability | 138,100 | 159,626 | ||||||
| TOTAL CURRENT LIABILITIES | 1,488,085 | 6,217,755 | ||||||
| NON-CURRENT LIABILITIES | ||||||||
| Notes payable, related parties | 5,348,112 | - | ||||||
| TOTAL LIABILITIES | 6,836,197 | 6,217,755 | ||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| STOCKHOLDERS' DEFICIT | ||||||||
| PREFERRED STOCK, SERIES A CONVERTIBLE, par value $0.001, 6,175 authorized; 6,175 shares issued and 0 and 1,165 shares outstanding at December 31, 2015 and 2014, respectively | - | 1 | ||||||
| PREFERRED STOCK - UNDESIGNATED, par value $0.001, 4,993,825 shares authorized; no shares issued and outstanding | - | - | ||||||
| COMMON STOCK, par value $0.001, 350,000,000 shares authorized; 63,056,519 issued and outstanding at December 31, 2015; 150,000,000 shares authorized; 60,726,519 issued and outstanding at December 31, 2014 | 63,057 | 60,727 | ||||||
| ADDITIONAL PAID-IN CAPITAL | 87,086,677 | 86,584,472 | ||||||
| ACCUMULATED DEFICIT | (92,994,408 | ) | (88,184,123 | ) | ||||
| ACCUMULATED OTHER COMPREHENSIVE LOSS | (33,162 | ) | (12,477 | ) | ||||
| TOTAL STOCKHOLDERS' DEFICIT | (5,877,836 | ) | (1,551,400 | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ | 958,361 | $ | 4,666,355 |
| SANUWAVE HEALTH, INC. AND SUBSIDIARIES |
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS |
| Years Ended December 31, 2015 and 2014 |
| 2015 | 2014 | |||||||
| REVENUES | $ | 965,501 | $ | 847,367 | ||||
| COST OF REVENUES | 284,962 | 219,975 | ||||||
| GROSS PROFIT | 680,539 | 627,392 | ||||||
| OPERATING EXPENSES | ||||||||
| Research and development | 2,172,819 | 3,000,807 | ||||||
| General and administrative | 2,735,129 | 3,269,033 | ||||||
| Depreciation | 3,612 | 14,286 | ||||||
| Amortization | 306,757 | 306,756 | ||||||
| Gain on sale of assets | (100,000 | ) | - | |||||
| TOTAL OPERATING EXPENSES | 5,118,317 | 6,590,882 | ||||||
| OPERATING LOSS | (4,437,778 | ) | (5,963,490 | ) | ||||
| OTHER (INCOME) EXPENSE | ||||||||
| Gain on warrant valuation adjustment | 58,515 | 458,857 | ||||||
| Interest expense, net | (399,832 | ) | (433,775 | ) | ||||
| Amortization of debt discount | (12,358 | ) | - | |||||
| Interest expense on 18% Convertible Promissory Notes | - | (7,168 | ) | |||||
| Accretion of debt discount on convertible promissory note | - | (12,776 | ) | |||||
| Loss on foreign currency exchange | (18,832 | ) | (15,728 | ) | ||||
| TOTAL OTHER EXPENSE | (372,507 | ) | (10,590 | ) | ||||
| NET LOSS | (4,810,285 | ) | (5,974,080 | ) | ||||
| OTHER COMPREHENSIVE LOSS | ||||||||
| Foreign currency translation adjustments | (20,685 | ) | (19,165 | ) | ||||
| TOTAL COMPREHENSIVE LOSS | $ | (4,830,970 | ) | $ | (5,993,245 | ) | ||
| LOSS PER SHARE: | ||||||||
| Net loss - basic and diluted | $ | (0.08 | ) | $ | (0.12 | ) | ||
| Weighted average shares outstanding - basic and diluted | 63,025,202 | 48,212,910 |
| SANUWAVE HEALTH, INC. AND SUBSIDIARIES |
| CONSOLIDATED STATEMENTS OF CASH FLOWS |
| Years Ended December 31, 2015 and 2014 |
| 2015 | 2014 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | (4,810,285 | ) | $ | (5,974,080 | ) | ||
| Adjustments to reconcile loss from continuing operations to net cash used by operating activities | ||||||||
| Amortization | 306,757 | 306,756 | ||||||
| Depreciation | 3,612 | 14,286 | ||||||
| Change in allowance for doubtful accounts | (6,055 | ) | (28,264 | ) | ||||
| Stock-based compensation - employees, directors and advisors | 504,534 | 135,015 | ||||||
| Stock issued for consulting services | - | 743,150 | ||||||
| Gain on sale of assets | (100,000 | ) | - | |||||
| Gain on warrant valuation adjustment | (58,515 | ) | (458,857 | ) | ||||
| Amortization of debt discount | 12,358 | - | ||||||
| Accretion of debt discount on a convertible promissory note | - | 12,776 | ||||||
| Accrued interest on 18% Convertible Promissory Notes | - | 7,168 | ||||||
| Changes in assets - (increase)/decrease | ||||||||
| Accounts receivable - trade | 18,005 | 81,596 | ||||||
| Inventory | (13,037 | ) | (25,865 | ) | ||||
| Prepaid expenses | 4,562 | (53,530 | ) | |||||
| Other | 9 | 338 | ||||||
| Changes in liabilities - increase/(decrease) | ||||||||
| Accounts payable | 277,426 | (703,188 | ) | |||||
| Accrued expenses | (10,082 | ) | (494,116 | ) | ||||
| Accrued employee compensation | 239,316 | (137,876 | ) | |||||
| Interest payable, related parties | 157,939 | (81,865 | ) | |||||
| Promissory notes - accrued interest | - | (21,813 | ) | |||||
| NET CASH USED BY OPERATING ACTIVITIES | (3,473,456 | ) | (6,678,369 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Proceeds from sale of assets | 100,000 | - | ||||||
| Purchase of property and equipment | - | (8,859 | ) | |||||
| NET CASH PROVIDED BY (USED BY) INVESTING ACTIVITIES | 100,000 | (8,859 | ) | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Proceeds from 2014 Private Placement, net | - | 8,562,500 | ||||||
| Proceeds from sale of capital stock - subscription agreement | - | 900,000 | ||||||
| Proceeds from 18% Convertible Promissory Notes | - | 815,000 | ||||||
| Proceeds from convertible promissory notes, net | - | 325,000 | ||||||
| Proceeds from employee stock option exercise | - | 12,600 | ||||||
| Payments of principal on convertible promissory notes | - | (450,000 | ) | |||||
| Payments of principal on promissory notes | - | (90,000 | ) | |||||
| Payments of principal on capital lease | - | (3,951 | ) | |||||
| NET CASH PROVIDED BY FINANCING ACTIVITIES | - | 10,071,149 | ||||||
| EFFECT OF EXCHANGE RATES ON CASH | (20,685 | ) | (19,165 | ) | ||||
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (3,394,141 | ) | 3,364,756 | |||||
| CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 3,547,071 | 182,315 | ||||||
| CASH AND CASH EQUIVALENTS, END OF YEAR | $ | 152,930 | $ | 3,547,071 | ||||
| SUPPLEMENTAL INFORMATION | ||||||||
| Cash paid for interest | $ | 242,904 | $ | 539,669 |