"After a couple of quarters spent addressing manufacturing and supply issues, bringing costs into line, and setting the Company up for growth, we are very pleased to state that we believe that the acceleration is here," said Morgan Frank, CEO. "Q4 and FY 2023 as a whole were both records for the Company not just on revenue growth, but on operating profitability as well and we will continue to pursue our stated goal of rapid, profitable growth in the year to come and as our forward guidance in this press release indicates, we expect growth in 2024 to be markedly higher than in 2023 as we move past the operating constraints that have held us back and begin to realize the potential of the Company and of UltraMIST."
SANUWAVE recently launched its new website.
Please visit us at https://sanuwave.com and use the investor section to subscribe to future releases and news.
Financial Outlook
SANUWAVE is initiating annual revenue guidance for the fiscal year ending December 31, 2024. The Company anticipates revenue growth of over 50% compared to FY 2023 with FY 2024 revenues expected to total over $30 million.
The Company also forecasts Q1 2024 revenue to rise 45-55% vs Q1 2023 and for gross margin as a percentage of revenue to increase back into the mid 70s.
Our merger with SEPA remains ongoing and active. Our financials went stale in February and so getting audited Q4 numbers out was important to being able to file the super 8-K for the business combination. We're continuing to work toward finalizing exchange listing and hope to have more soon.
As previously announced, a business update will occur via conference call on March 22, 2024. Materials for the conference call at 8:30 a.m. EST are included on the Company website at www.sanuwave.com/investors.
Telephone access to the call will be available by dialing the following numbers:
Participant Listening: 1-800-267-6316 or 1-203-518-9783
OR click the link for instant telephone access to the event.
https://viavid.webcasts.com/starthere.jsp?ei=1661785&tp_key=8f8d9c1839
A replay will be made available through April 15, 2024:
Toll-Free: 1-844-512-2921 or 1-412-317-6671
Replay Access ID: 11155229
About SANUWAVE
SANUWAVE Health is focused on the research, development, and commercialization of its patented, non-invasive and biological response-activating medical systems for the repair and regeneration of skin, musculoskeletal tissue, and vascular structures.
SANUWAVE's end-to-end wound care portfolio of regenerative medicine products and product candidates helps restore the body's normal healing processes. SANUWAVE applies and researches its patented energy transfer technologies in wound healing, orthopedic/spine, aesthetic/cosmetic, and cardiac/endovascular conditions.
Non-GAAP Financial Measures
This press release includes certain financial measures that are not presented in our financial statements prepared in accordance with accounting principles generally accepted in the United States (U.S.) ("U.S. GAAP"). These financial measures are considered "non-GAAP financial measures" and are intended to supplement, and should not be considered as superior to, or a replacement for, financial measures presented in accordance with U.S. GAAP.
The Company uses Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") and Adjusted EBITDA to assess its operating performance. Adjusted EBITDA is Earnings before Interest, Taxes, Depreciation and Amortization adjusted for the change in fair value of derivatives and any significant non-cash or infrequent charges. EBITDA and Adjusted EBITDA should not be considered as alternatives to net loss as a measure of financial performance or any other performance measure derived in accordance with GAAP, and they should not be construed as an inference that the Company's future results will be unaffected by unusual or infrequent items. These non-GAAP financial measures are presented in a consistent manner for each period, unless otherwise disclosed. The Company uses these measures for the purpose of evaluating its historical and prospective financial performance, as well as its performance relative to competitors. These measures also help the Company to make operational and strategic decisions. The Company believes that providing this information to investors, in addition to GAAP measures, allows them to see the Company's results through the eyes of management, and to better understand its historical and future financial performance. These non-GAAP financial measures are also frequently used by analysts, investors, and other interested parties to evaluate companies in our industry, when considered alongside other GAAP measures.
EBITDA and Adjusted EBITDA have their limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of the Company's results as reported under GAAP. Some of these limitations are that EBITDA and Adjusted EBITDA:
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Do not reflect every expenditure, future requirements for capital expenditures or contractual commitments.
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Do not reflect all changes in our working capital needs.
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Do not reflect interest expense, or the amount necessary to service our outstanding debt.
As presented in the GAAP to Non-GAAP Reconciliations section below, the Company's non-GAAP financial measures exclude the impact of certain charges that contribute to our net loss.
Also note that the accompanying notes to consolidated financial statements are an integral part of these statements.
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 future financial results, production expectations and constraints, and plans for future business development activities. 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 supply chain and production constraints, regulatory oversight, the Company's ability to manage its capital resource issues, competition, the Company's ability to consummate the proposed business combination with SEP Acquisition Corp. 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.
Contact: investors@sanuwave.com
| SELECTED FINANCIAL DATA |
| FOR THE QUARTERS ENDED DECEMBER 31, 2023 AND 2022 |
| (in thousands) | | 2023 | | | | 2022 | |
| | | | | |
| Revenue | | $ | 6,994 | | | $ | 5,500 | |
| Cost of revenues | | 2,159 | | | | 1,190 | |
| | | | | |
| Gross Margin | | 4,835 | | | | 4,310 | |
| | | | 69.1 | % | | | 78.4 | % |
| Total operating expenses | | 3,796 | | | | 5,773 | |
| Operating Income (Loss) | $ | 1,039 | | | $ | (1,463 | ) |
| | | | | |
| Total other income (expense) | | 17,196 | | | | (4,234 | ) |
| | | | | |
| Net Income (Loss) | $ | 18,235 | | | $ | (5,697 | ) |
| | | | | |
| |
| NON-GAAP ADJUSTED EBITDA |
| FOR THE QUARTERS ENDED DECEMBER 31, 2023 AND 2022 |
| (in thousands) | | 2023 | | | | 2022 | |
| | | | | |
| Net Income (Loss) | $ | 18,235 | | | $ | (5,697 | ) |
| Non-GAAP Adjustments: | | | |
| Interest expense | | 3,119 | | | | 4,160 | |
| Depreciation and amortization | | 247 | | | | 271 | |
| EBITDA | | | 21,601 | | | | (1,266 | ) |
| Non-GAAP Adjustments for Adjusted EBITDA: | |
| Change in fair value of derivative liabilities | | (20,323 | ) | | | (57 | ) |
| Other non-cash or non-recurring charges: | | | |
| Release of historical accrued expenses | | (616 | ) | | | - | |
| Adjusted EBITDA | $ | 662 | | | $ | (1,323 | ) |
| | | | | |
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS |
| Years ended December 31, 2023 and 2022 |
| | | | | |
| (In thousands, except share and per share data) | | 2023 | | | | 2022 | |
| | | | | |
| Revenue | $ | 20,398 | | | $ | 16,742 | |
| Cost of revenues | | 6,035 | | | | 4,331 | |
| | | | | |
| Gross Margin | | 14,363 | | | | 12,411 | |
| | | | | |
| Operating Expenses: | | | |
| | General and administrative | | 8,674 | | | | 12,556 | |
| | Selling and marketing | | 4,898 | | | | 7,474 | |
| | Research and development | | 579 | | | | 567 | |
| | Depreciation and amortization | | 752 | | | | 766 | |
| Total Operating Expenses | | 14,903 | | | | 21,363 | |
| | | | | |
| Operating Loss | | (540 | ) | | | (8,952 | ) |
| | | | | |
| Other Income (Expense) | | | |
| | Interest expense | | (12,946 | ) | | | (12,771 | ) |
| | Interest expense, related party | | (2,677 | ) | | | (1,361 | ) |
| | Change in fair value of derivative liabilities | | (9,621 | ) | | | 16,654 | |
| | Loss on issuance of debt | | - | | | | (3,434 | ) |
| | Loss on extinguishment of debt | | - | | | | (418 | ) |
| | Other expense | | (19 | ) | | | (9 | ) |
| Total Other Expense | | (25,263 | ) | | | (1,339 | ) |
| | | | | |
| Net Loss Before Income Taxes | | (25,803 | ) | | | (10,291 | ) |
| | | | | |
| Income tax expense | | 4 | | | | 2 | |
| | | | | |
| Net Loss | $ | (25,807 | ) | | $ | (10,293 | ) |
| | | | | |
| Other Comprehensive Loss | | | |
| | Foreign currency translation adjustments | | (44 | ) | | | 6 | |
| Total Comprehensive Loss | $ | (25,851 | ) | | $ | (10,287 | ) |
| | | | | |
| Loss per Share: | | | |
| Net loss per share, basic and diluted | $ | (0.03 | ) | | $ | (0.02 | ) |
| Weighted average shares outstanding, basic and diluted | | 793,850,994 | | | | 549,470,787 | |
| | | | | |
| | | | |
| Adjusted EBITDA | | For the year ended | |
| (in thousands) | | | 2023 | | | | 2022 | | |
| | | | | | |
| Net income (loss) | | $ | (25,807 | ) | | $ | (10,293 | ) | |
| Non-GAAP Adjustments: | | | | | |
| Interest expense | | | 15,623 | | | | 14,132 | | |
| Depreciation and amortization | | | 1,028 | | | | 952 | | |
| EBITDA | | | (9,156 | ) | | | 4,791 | | |
| Non-GAAP Adjustments for Adjusted EBITDA: | | | | |
| Change in fair value of derivative liabilities | | | 9,621 | | | | (16,654 | ) | |
| Other non-cash or non-recurring charges: | | | | | |
| Release of historical accrued expenses | | | (1,866 | ) | | | - | | |
| Shares issued for services | | | 224 | | | | 888 | | |
| Loss on issuance of debt | | | - | | | | 3,434 | | |
| Loss on extinguishment of debt | | | - | | | | 418 | | |
| Adjusted EBITDA | | $ | (1,177 | ) | | $ | (7,123 | ) | |
| | | | | | |
| CONSOLIDATED BALANCE SHEETS |
| December 31, 2023 and 2022 |
| | | | | | |
| (In thousands, except share data) | | | 2023 | | | | 2022 | |
| ASSETS |
| Current Assets: | | | | |
| | Cash | | $ | 1,797 | | | $ | 1,153 | |
| | Accounts receivable, net of allowance of $1,237 and $1,037, respectively | | | 3,314 | | | | 4,029 | |
| | Inventory | | | 2,951 | | | | 868 | |
| | Prepaid expenses and other current assets | | | 1,722 | | | | 570 | |
| Total Current Assets | | | 9,784 | | | | 6,620 | |
| Non-Current Assets: | | | | |
| | Property, equipment and right of use assets, net | | | 938 | | | | 856 | |
| | Intangible assets, net | | | 4,434 | | | | 5,137 | |
| | Goodwill | | | 7,260 | | | | 7,260 | |
| Total Non-Current Assets | | | 12,632 | | | | 13,253 | |
| | | | | | |
| Total Assets | | $ | 22,416 | | | $ | 19,873 | |
| | | | | | |
| LIABILITIES |
| Current Liabilities: | | | | |
| | Senior secured debt, in default | | $ | 18,278 | | | $ | 14,416 | |
| | Convertible promissory notes payable | | | 5,404 | | | | 16,713 | |
| | Convertible promissory notes payable, related parties | | | 1,705 | | | | 7,409 | |
| | Asset-backed secured promissory notes payable | | | 3,117 | | | | - | |
| | Asset-backed secured promissory notes payable, related parties | | | 1,458 | | | | - | |
| | Accounts payable | | | 5,705 | | | | 4,400 | |
| | Accrued expenses | | | 5,999 | | | | 8,512 | |
| | Factoring liabilities | | | 1,490 | | | | 2,130 | |
| | Warrant liability | | | 14,447 | | | | 1,416 | |
| | Accrued interest | | | 5,444 | | | | 4,052 | |
| | Accrued interest, related parties | | | 669 | | | | 788 | |
| | Current portion of contract liabilities | | | 92 | | | | 60 | |
| | Other | | | 947 | | | | 319 | |
| Total Current Liabilities | | | 64,755 | | | | 60,215 | |
| Non-Current Liabilities: | | | | |
| | Lease liabilities | | | 492 | | | | 438 | |
| | Contract liabilities | | | 347 | | | | 230 | |
| Total Non-Current Liabilities | | | 839 | | | | 668 | |
| | | | | | |
| Total Liabilities | | $ | 65,594 | | | $ | 60,883 | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| STOCKHOLDERS' DEFICIT |
| Preferred stock, par value $0.001, 5,000,000 shares authorized, 6,175 Series A, 293 Series B, 90 Series C, and 8 Series D designated shares, respectively; no shares issues and outstanding at 2023 and 2022 | $ | - | | | $ | - | |
| Common stock, par value $0.001, 2,500,000,000 shares authorized, 1,140,559,527 and 548,737,651 issued and outstanding at 2023 and 2022, respectively | | 1,140 | | | | 549 | |
| Additional paid-in capital | | | 175,842 | | | | 152,750 | |
| Accumulated deficit | | | (220,049 | ) | | | (194,242 | ) |
| Accumulated other comprehensive loss | | | (111 | ) | | | (67 | ) |
| Total Stockholders' Deficit | | | (43,178 | ) | | | (41,010 | ) |
| Total Liabilities and Stockholders' Deficit | | $ | 22,416 | | | $ | 19,873 | |
| | | | | | |
| |
| CONSOLIDATED STATEMENTS OF CASH FLOWS |
| Years ended December 31, 2023 and 2022 |
| (In thousands) | | | | 2023 | | | | 2022 | |
| | | | | | | |
| Cash Flows - Operating Activities: | | | |
| Net income (loss) | | | $ | (25,807 | ) | | $ | (10,293 | ) |
| | Adjustments to reconcile net loss to net cash used by operating activities | | | |
| | | Depreciation and amortization | | 1,028 | | | | 952 | |
| | | Bad debt expense | | 781 | | | | 253 | |
| | | Shares issued for services | | 224 | | | | 888 | |
| | | Gain/loss on extinguishment of debt | | - | | | | 418 | |
| | | Income tax expense | | 4 | | | | 2 | |
| | | Change in fair value of derivative liabilities | | 9,621 | | | | (16,654 | ) |
| | | Loss on issuance of debt | | - | | | | 3,434 | |
| | | Amortization of debt issuance and debt discounts | | 6,911 | | | | 4,950 | |
| | | Changes in operating assets and liabilities | | | |
| | | | Accounts receivable | | (53 | ) | | | (1,748 | ) |
| | | | Inventory, prepaid expenses and other assets | | (3,006 | ) | | | (72 | ) |
| | | | Accounts payable | | 1,546 | | | | (2,550 | ) |
| | | | Accrued interest and accrued interest, related parties | | 6,306 | | | | 3,182 | |
| | | | Accrued expenses and contract liabilities | | (2,093 | ) | | | 69 | |
| Net Cash Used by Operating Activities | | (4,538 | ) | | | (17,169 | ) |
| | | | | | | |
| Cash Flows - Investing Activities | | | |
| | Proceeds of property and equipment | | 21 | | | | 332 | |
| Net Cash Flows Provided by Investing Activities | | 21 | | | | 332 | |
| | | | | | | |
| Cash Flows - Financing Activities | | | |
| | Proceeds from convertible promissory notes | | 3,026 | | | | 16,227 | |
| | Proceeds from bridge notes payable | | 2,994 | | | |
| | Proceeds from senior secured promissory note | | - | | | | 2,940 | |
| | Proceeds from factoring | | (639 | ) | | | 695 | |
| | Proceeds from warrant exercises | | - | | | | 100 | |
| | Proceeds from short term borrowings | | - | | | | 640 | |
| | Repayments of debt principal | | - | | | | (2,981 | ) |
| | Principal payments on finance leases | | (170 | ) | | | (237 | ) |
| Net Cash Flows Provided by Financing Activities | | 5,211 | | | | 17,384 | |
| | | | | | | |
| Effect of Exchange Rates on Cash | | (50 | ) | | | (13 | ) |
| | | | | | | |
| Net Change in Cash During Period | | 644 | | | | 534 | |
| | | | | | | |
| Cash at Beginning of Period | | 1,153 | | | | 619 | |
| Cash at End of Period | | $ | 1,797 | | | $ | 1,153 | |
| | | | | | | |
| Supplemental Information: | | | |
| | Cash paid for interest | $ | 1,958 | | | $ | 3,712 | |
| Non-Cash Investing and Financing Activities: | | | |
| | Warrants issued in conjunction with senior secured promissory note payable and | | | |
| | convertible promissory notes payable | $ | 1,682 | | | $ | 4,177 | |
| | Conversion of convertible notes payable and accrued interest to common stock | | 23,156 | | | | - | |
| | Embedded conversion feature on convertible debt | | 835 | | | | 2,760 | |
| | Common shares issued for advisory shares | | 302 | | | | - | |
| | Settlement of debt and warrants with stock | | - | | | | 1,361 | |
| | Common shares issued in conjunction with senior secured debt | | - | | | | 3,720 | |
| | Warrant issuance in conjunction with convertible notes | | - | | | | 1,708 | |
| | Reclassification of warrant liabilities to equity due to cashless warrant exercise | | - | | | | 2,166 | |
| | Working capital balances refinanced into convertible notes payable | | - | | | | 2,363 | |
| |
| | | |
