Core Viewpoint - Sanara MedTech Inc. is set to report its second quarter 2025 financial results on August 13, 2025, focusing on transformative technologies in the medical field to enhance clinical outcomes and reduce healthcare costs [1][4]. Financial Results Announcement - The financial results for the quarter ending June 30, 2025, will be discussed in a conference call and webcast scheduled for August 13, 2025, at 8:00 a.m. Eastern Time [2]. - A toll-free number for the teleconference is provided, along with details for international callers and a replay option available until August 27, 2025 [2]. Company Overview - Sanara MedTech Inc. specializes in developing and commercializing technologies aimed at improving clinical outcomes in surgical, chronic wound, and skin markets [4]. - The company markets a range of products including CellerateRX Surgical Activated Collagen and FORTIFY TRG Tissue Repair Graft, primarily in the North American advanced wound care and surgical tissue repair markets [4]. - Sanara's product pipeline includes innovative candidates targeting opportunistic pathogens, wound healing, and tissue debridement, with a commitment to meeting quality and regulatory standards [4].

Core Insights - Sanara MedTech Inc. has launched a pilot program through its subsidiary Tissue Health Plus (THP) aimed at providing value-based wound care solutions for chronic wounds across six states [1][2] - The THP technology platform will serve as a Wound Care Operating System for a provider group, utilizing Co-Pilot software to standardize patient care and streamline administrative processes [2] - The pilot program is expected to validate and optimize the THP technology platform through real-world patient encounters, with plans for expansion to additional practitioners and locations [2] Company Overview - Sanara MedTech Inc. focuses on developing and commercializing technologies to improve clinical outcomes and reduce healthcare costs in surgical and chronic wound markets [4] - The company markets a range of surgical and wound care products primarily in the North American market, including CellerateRX Surgical Activated Collagen and various antimicrobial solutions [4][5] - THP aims to transform the $100+ billion wound care market by addressing gaps in chronic wound care, with a goal of improving healing rates to over 85% and reducing total care costs by more than 25% [3] Technology and Innovation - THP's platform combines AI-powered clinical decision support, virtual care coordination, and an integrated provider network to deliver personalized wound care [3] - The pilot program is part of a broader strategy to engage with payers and financial partners to support the implementation of THP's value-based care solutions [2][3]

Company Overview - Sanara MedTech's market capitalization is $2782 million, based on 89 million common shares outstanding as of May 14, 2025, and a share price of $3130[9] - The company's net revenue for the trailing twelve months (TTM) is $916 million, with a net loss of $116 million and an adjusted EBITDA of $30 million[9] - Sanara MedTech operates through two business segments: Sanara Surgical and Tissue Health Plus[9] Sanara Surgical Segment - The relevant surgical solutions market opportunity is $10 billion[7, 13] - Sanara Surgical achieved $867 million in net revenue in 2024, representing a 33% year-over-year growth[23] - The segment has expanded its distribution network to over 350 distributors, a 40% increase year-over-year, and has access to over 4,000 hospital access points, a 33% increase year-over-year[23] Tissue Health Plus Segment - The chronic wound care market represents a $100 billion+ annual expenditure[12, 48] - The Tissue Health Plus segment is targeting a $115-$277 billion total addressable market (TAM) within the Medicare Advantage segment, focusing on 308 million wound patients[52] - The company estimates that 40-66% healing rates for chronic wounds (vs 90%+ potential)[46] Financial Performance - Sanara MedTech's net revenue for Q1 2025 was $234 million, a 26% increase year-over-year compared to $185 million in Q1 2024[56, 57, 72] - Consolidated adjusted EBITDA for Q1 2025 was $07 million, a 111% increase year-over-year[59] - For the full year 2024, Sanara Surgical's adjusted EBITDA increased by 73% year-over-year[62]

Group 1 - Sanara MedTech (SMTI) shares have faced pressure this year despite strong growth and improving profitability in the Surgical segment, primarily due to concerns over rising debt levels [1] - The company operates in a sector that is often under-researched, focusing on small to mid-cap companies with potential asymmetric investment opportunities [1] Group 2 - The article reflects the author's personal investment experience and analysis, emphasizing the importance of thorough research in identifying market-beating returns [1]

Part I – Financial Information [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents Sanara MedTech Inc.'s unaudited consolidated financial statements for the quarter ended March 31, 2025, including balance sheets, statements of operations, changes in shareholders' equity, and cash flows, along with detailed notes on accounting policies, debt, equity investments, and segment reporting [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets%20as%20of%20March%2031%2C%202025%20%28Unaudited%29%20and%20December%2031%2C%202024) The Consolidated Balance Sheets show an increase in total assets and liabilities from December 31, 2024, to March 31, 2025, primarily driven by higher cash, intangible assets, and long-term debt, while total shareholders' equity decreased Consolidated Balance Sheets (USD) | Metric | March 31, 2025 (USD) | December 31, 2024 (USD) | Change (USD) | % Change | | :-------------------------------- | :------------- | :---------------- | :----- | :------- | | Total Assets | $96,378,581 | $88,091,992 | $8,286,589 | 9.41% | | Total Liabilities | $59,711,004 | $49,180,030 | $10,530,974 | 21.41% | | Total Shareholders' Equity | $36,667,577 | $38,911,962 | $(2,244,385) | -5.77% | | Cash | $20,687,806 | $15,878,295 | $4,809,511 | 30.29% | | Intangible assets, net | $42,013,997 | $41,006,776 | $1,007,221 | 2.46% | | Long-term debt | $43,402,223 | $30,689,290 | $12,712,933 | 41.42% | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations%20%28Unaudited%29%20for%20the%20Three%20Months%20Ended%20March%2031%2C%202025%20and%202024) The company reported a significant increase in net revenue and gross profit for Q1 2025 compared to Q1 2024, but also experienced a higher net loss due to increased operating expenses, particularly selling, general and administrative costs, and a substantial rise in interest expense Consolidated Statements of Operations (USD) | Metric | Three Months Ended March 31, 2025 (USD) | Three Months Ended March 31, 2024 (USD) | Change (USD) | % Change | | :----------------------------------- | :-------------------------------- | :-------------------------------- | :----- | :------- | | Net Revenue | $23,434,096 | $18,536,638 | $4,897,458 | 26.42% | | Cost of goods sold | $1,834,967 | $1,890,046 | $(55,079) | -2.91% | | Gross profit | $21,599,129 | $16,646,592 | $4,952,537 | 29.75% | | Selling, general and administrative | $21,440,610 | $16,192,259 | $5,248,351 | 32.41% | | Research and development | $1,114,138 | $946,298 | $167,840 | 17.74% | | Operating loss | $(2,080,029) | $(1,531,707) | $(548,322) | 35.79% | | Interest expense | $(1,317,092) | $(267,336) | $(1,049,756) | 392.67% | | Net loss attributable to Sanara MedTech shareholders | $(3,527,177) | $(1,764,184) | $(1,762,993) | 99.93% | | Net loss per share, basic and diluted | $(0.41) | $(0.21) | $(0.20) | 95.24% | [Consolidated Statements of Changes in Shareholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Shareholders%27%20Equity%20%28Unaudited%29%20for%20the%20Three%20Months%20Ended%20March%2031%2C%202025%20and%202024) **Shareholders' equity** **decreased** from **$38.9 million** at **December 31, 2024**, to **$36.7 million** at **March 31, 2025**, **primarily due to** a **net loss** of **$3.5 million**, **partially offset by** **$1.3 million** in **share-based compensation** Consolidated Statements of Changes in Shareholders' Equity (USD) | Metric | Balance at December 31, 2024 (USD) | Balance at March 31, 2025 (USD) | Change (USD) | | :-------------------------------- | :--------------------------- | :------------------------ | :----- | | Total Shareholders' Equity | $38,911,962 | $36,667,577 | $(2,244,385) | | Accumulated Deficit | $(37,784,392) | $(41,311,569) | $(3,527,177) | | Share-based compensation | - | $1,304,904 | $1,304,904 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20%28Unaudited%29%20for%20the%20Three%20Months%20Ended%20March%2031%2C%202025%20and%202024) **Net cash used** in operating activities **increased** to **$2.0 million** in **Q1 2025** from **$1.6 million** in **Q1 2024**. Investing activities **used** **$5.2 million**, **primarily due to** equity investments and property/equipment, while financing activities **provided** **$12.0 million**, **mainly from** loan proceeds Cash Flow Activity (USD) | Cash Flow Activity | Three Months Ended March 31, 2025 (USD) | Three Months Ended March 31, 2024 (USD) | Change (USD) | | :----------------------------------- | :-------------------------------- | :-------------------------------- | :----- | | Net cash used in operating activities | $(1,998,884) | $(1,594,370) | $(404,514) | | Net cash used in investing activities | $(5,179,855) | $(65,818) | $(5,114,037) | | Net cash provided by (used in) financing activities | $11,988,250 | $(658,794) | $12,647,044 | | Net increase (decrease) in cash | $4,809,511 | $(2,318,982) | $7,128,493 | | Cash, end of period | $20,687,806 | $2,828,234 | $17,859,572 | - **Cash used** in investing activities in **Q1 2025** included **$3.5 million** for a **minority investment** in BMI and **$1.7 million** for **capitalizing** THP technology platform development costs[232](index=232&type=chunk) - The **increase** in **cash** from financing activities in **Q1 2025** was **primarily due to** proceeds from the CRG **Term Loan**[233](index=233&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) These notes provide detailed disclosures on the company's accounting policies, financial instruments, debt, equity investments, and segment reporting, offering context to the unaudited consolidated financial statements [Note 1 – Nature of Business and Background](index=9&type=section&id=NOTE%201%20%E2%80%93%20NATURE%20OF%20BUSINESS%20AND%20BACKGROUND) Sanara MedTech Inc. is a medical technology company focused on surgical, chronic wound, and skincare markets, operating through two reportable segments: Sanara Surgical and Tissue Health Plus (THP), with a segment change in Q2 2024 to reflect growing investment in value-based wound care - Sanara MedTech operates in surgical, chronic wound, and skincare markets[21](index=21&type=chunk) - The company has two reportable segments: Sanara Surgical and Tissue Health Plus (THP)[22](index=22&type=chunk) - Sanara Surgical markets soft tissue repair and bone fusion products, including CellerateRX Surgical and BIASURGE Advanced Surgical Solution[23](index=23&type=chunk) - THP focuses on a value-based wound care program for payers and risk-bearing entities, with a pilot program launching in **Q2 2025**[25](index=25&type=chunk)[26](index=26&type=chunk) [Note 2 – Summary of Significant Accounting Policies](index=10&type=section&id=NOTE%202%20%E2%80%94%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the company's key accounting policies, including principles of consolidation, use of estimates, revenue recognition, inventory valuation, and treatment of long-lived assets, goodwill, intangible assets, and equity investments, also detailing recently adopted and issued accounting pronouncements - **Revenue** is recognized when control of goods or services is transferred to the customer, **primarily from** product sales[34](index=34&type=chunk)[38](index=38&type=chunk) Revenue Streams (Three Months Ended March 31) (USD) | Product Category | 2025 (USD) | 2024 (USD) | | :----------------------- | :----------- | :----------- | | Soft tissue repair products | $20,532,440 | $16,082,292 | | Bone fusion products | $2,901,656 | $2,454,346 | | **Total Net Revenue** | **$23,434,096** | **$18,536,638** | - The company **capitalizes costs incurred** during the application development stage for internal use software, specifically for the THP platform, with approximately **$1.7 million** **capitalized** as of **March 31, 2025**[46](index=46&type=chunk)[48](index=48&type=chunk) - **Goodwill**, **primarily from** the Scendia acquisition, is tested annually for impairment; no impairment was recorded in **Q1 2025** or **Q1 2024**[49](index=49&type=chunk) - The company adopted ASU 2023-07 (Segment Reporting) **effective** **Q1 2025**, which did not **materially impact** financial position, results of operations, or cash flows[65](index=65&type=chunk) [Note 3 – Convertible Loan Receivable](index=16&type=section&id=NOTE%203%20%E2%80%93%20CONVERTIBLE%20LOAN%20RECEIVABLE) A convertible loan of **$1,101,478** (including accrued interest) to Biomimetic Innovations Limited (BMI) as of **December 31, 2024**, was converted into **equity** of BMI on **January 16, 2025**, resulting in a zero loan balance by **March 31, 2025** - **Convertible loan receivable** to BMI was **$1,101,478** as of **December 31, 2024**[68](index=68&type=chunk) - The loan was converted into **equity** of BMI on **January 16, 2025**, reducing the balance to zero by **March 31, 2025**[68](index=68&type=chunk) [Note 4 – Goodwill and Intangibles, Net](index=16&type=section&id=NOTE%204%20%E2%80%93%20GOODWILL%20AND%20INTANGIBLES%2C%20NET) **Goodwill** remained constant at **$3.6 million**, entirely within the Sanara Surgical segment, with no impairment recorded. **Total amortizable intangible assets increased** to **$42.0 million** as of **March 31, 2025**, from **$41.0 million** at **December 31, 2024**, **primarily due to** an **increase** in licenses Goodwill Carrying Amount (USD) | Date | Amount (USD) | | :----------------------- | :----------- | | December 31, 2023 | $3,601,781 | | December 31, 2024 | $3,601,781 | | March 31, 2025 | $3,601,781 | Intangible Assets, Net (USD) | Category | March 31, 2025 (Net) (USD) | December 31, 2024 (Net) (USD) | Change (USD) | | :----------------------- | :------------------- | :-------------------- | :----- | | Patents and Other IP | $32,439,841 | $33,000,384 | $(560,543) | | Customer relationships and other | $4,647,297 | $4,941,181 | $(293,884) | | Licenses | $4,926,859 | $3,065,211 | $1,861,648 | | **Total** | **$42,013,997** | **$41,006,776** | **$1,007,221** | - **Amortization expense** for intangible assets was **$1,078,152** for **Q1 2025**, **up from** **$972,451** for **Q1 2024**[70](index=70&type=chunk) [Note 5 – Investments in Equity Securities](index=17&type=section&id=NOTE%205%20%E2%80%93%20INVESTMENTS%20IN%20EQUITY%20SECURITIES) The company holds **equity investments** in privately held companies, including DirectDerm (**cost method**), ChemoMouthpiece, SI Technologies, and BMI (**equity method**), with significant changes including the conversion of a BMI loan into **equity** and the reclassification of Pixalere shares as an intangible asset - The company's **investment** in Pixalere Healthcare Inc. shares was reclassified as an intangible asset for an amended license agreement, and Pixalere Canada's **equity** ownership in Pixalere USA was redeemed, **effective** **January 2, 2025**[74](index=74&type=chunk)[75](index=75&type=chunk) - On **January 16, 2025**, the company made an initial cash **investment** of **€3.0 million** in BMI and converted a **€1.0 million** convertible loan, acquiring approximately **6.67% equity**, accounted for using the **equity method**[82](index=82&type=chunk)[83](index=83&type=chunk) Summary of Investments (USD) | Investment Type | March 31, 2025 (Carrying Amount) (USD) | December 31, 2024 (Carrying Amount) (USD) | | :-------------------------- | :------------------------------- | :-------------------------------- | | **Equity Method Investments** | | | | ChemoMouthpiece, LLC | $5,098,210 | $5,172,242 | | SI Healthcare Technologies, LLC | $40,703 | $40,703 | | Biomimetic Innovations Limited | $4,551,370 | $- | | **Total Equity Method** | **$9,690,283** | **$5,212,945** | | **Cost Method Investments** | | | | Direct Dermatology, Inc. | $1,000,000 | $1,000,000 | | Pixalere Healthcare Inc. | $- | $2,084,278 | | **Total Cost Method** | **$1,000,000** | **$3,084,278** | | **Total Investments** | **$10,690,283** | **$8,297,223** | Share of Losses from Equity Method Investments (Three Months Ended March 31) (USD) | Investment | 2025 (USD) | 2024 (USD) | | :-------------------------- | :--------- | :--- | | ChemoMouthpiece, LLC | $(74,032) | $- | | Biomimetic Innovations Limited | $(69,576) | $- | | **Total** | **$(143,608)** | **$-** | [Note 6 – Operating Leases](index=20&type=section&id=NOTE%206%20%E2%80%93%20OPERATING%20LEASES) As of **March 31, 2025**, the company had ROU assets of **$1,173,851** and related lease liabilities of **$1,317,657** for office space, with a **weighted average remaining lease term** of **5.7 years** and a **discount rate** of **13.0%**. Lease expense for **Q1 2025** was **$131,568** - Operating lease ROU assets were **$1,173,851** and lease liabilities were **$1,317,657** as of **March 31, 2025**[89](index=89&type=chunk) - The **weighted average remaining lease term** was **5.7 years** and the **weighted average discount rate** was **13.0%** as of **March 31, 2025**[90](index=90&type=chunk) - Lease expense for the three months ended **March 31, 2025**, was **$131,568**[89](index=89&type=chunk) [Note 7 – Debt and Credit Facilities](index=21&type=section&id=NOTE%207%20%E2%80%93%20DEBT%20AND%20CREDIT%20FACILITIES) The company's **long-term debt**, **primarily from** the CRG **Term Loan**, **increased significantly** to **$43.4 million** as of **March 31, 2025**, from **$30.7 million** at **December 31, 2024**. The CRG **Term Loan**, totaling up to **$55.0 million**, bears **interest** at **13.25%** and has a maturity date of **May 30, 2029**, with **$12.25 million** available for future borrowing - The CRG **Term Loan** Agreement provides for a senior secured **term loan** of up to **$55.0 million**, with **$42.75 million** borrowed as of **March 31, 2025**[91](index=91&type=chunk)[94](index=94&type=chunk)[101](index=101&type=chunk) - The loan bears **interest** at **13.25%** per annum (**8.00%** cash, **5.25%** paid-in-kind) and matures on **May 30, 2029**[95](index=95&type=chunk) Outstanding Debt (Net of Debt Issuance Costs) (USD) | Metric | March 31, 2025 (USD) | December 31, 2024 (USD) | Change (USD) | | :-------------------------------- | :------------- | :---------------- | :----- | | CRG Term Loan | $42,750,000 | $30,500,000 | $12,250,000 | | Paid-in-kind interest | $1,250,289 | $838,965 | $411,324 | | Back-end fee | $534,165 | $358,086 | $176,079 | | Less: unamortized debt issuance costs | $(1,132,231) | $(1,007,761) | $(124,470) | | **Debt, net of debt issuance costs** | **$43,402,223** | **$30,689,290** | **$12,712,933** | - The company was in compliance with all debt covenants as of **March 31, 2025**, including maintaining liquidity above **$3.0 million** and meeting annual minimum **revenue** targets[102](index=102&type=chunk)[221](index=221&type=chunk) [Note 8 – Commitments and Contingencies](index=24&type=section&id=NOTE%208%20-%20COMMITMENTS%20AND%20CONTINGENCIES) This note details various license agreements for antimicrobial products (BIAKŌS, ABF, Debrider) with Rochal, an **exclusive license** and distribution agreement with BMI for trauma products, and acquisition-related **earnout liabilities**, including the Applied Asset Purchase, also covering a license agreement with Tufts University for collagen peptides - The company has **exclusive worldwide license agreements** with Rochal Industries, LLC for BIASURGE Advanced Surgical Solution, BIAKŌS Antimicrobial Wound Gel, BIAKŌS Antimicrobial Skin and Wound Cleanser, CuraShield Antimicrobial Barrier Film, and a debrider for human medical use[104](index=104&type=chunk)[108](index=108&type=chunk)[110](index=110&type=chunk) - Royalty expense under the BIAKŌS License Agreement was **$37,500** for **Q1 2025**, **up from** **$35,000** for **Q1 2024**[106](index=106&type=chunk) - On **January 16, 2025**, the company acquired **exclusive U.S. marketing, sales, and distribution rights** for BMI's OsStic and ARC products for trauma indications, with royalties of **3%** on OsStic **net sales** and annual minimum royalty payments[112](index=112&type=chunk)[115](index=115&type=chunk)[116](index=116&type=chunk) - The Precision Healing merger **earnout liability** was reduced to zero as of **December 31, 2024**, as performance thresholds were deemed unachievable[120](index=120&type=chunk) - The Applied Asset Purchase includes an Applied **Earnout** of up to **$10.0 million**, payable in cash upon achievement of certain performance thresholds related to **net sales** of a collagen-based product[122](index=122&type=chunk) [Note 9 – Shareholders' Equity](index=28&type=section&id=NOTE%209%20%E2%80%93%20SHAREHOLDERS%27%20EQUITY) The company's 2014 LTIP terminated in **September 2024**, replaced by the 2024 LTIP with **1,000,000 shares** authorized. In **Q1 2025**, **149,857 restricted stock awards** were issued, resulting in **$1.3 million** in **share-based compensation expense**. **Unrecognized share-based compensation** totaled **$8.1 million** as of **March 31, 2025** - The 2014 LTIP terminated on **September 3, 2024**, and the 2024 LTIP was approved with **1,000,000 shares** available for awards[126](index=126&type=chunk)[127](index=127&type=chunk) - **149,857 restricted common stock shares** were issued in **Q1 2025**, with a fair value of **$5,186,608**[128](index=128&type=chunk) - **Share-based compensation expense** was **$1,304,904** for **Q1 2025**, compared to **$803,386** for **Q1 2024**[129](index=129&type=chunk) - **Total unrecognized share-based compensation expense** was **$8,146,923** as of **March 31, 2025**, to be recognized over a weighted-average period of **1.5 years**[129](index=129&type=chunk) [Note 10 – Related Parties](index=29&type=section&id=NOTE%2010%20%E2%80%93%20RELATED%20PARTIES) The company has ongoing material transactions with related parties, including product license agreements with Rochal, a consulting agreement with Ann Beal Salamone, a director of the company and Rochal, and a transaction advisory services agreement with Catalyst - The company has **exclusive worldwide license agreements** with Rochal Industries, LLC for antimicrobial products and a debrider, with key personnel having significant interests in Rochal[132](index=132&type=chunk)[133](index=133&type=chunk)[134](index=134&type=chunk) - Ann Beal Salamone, a director, provides consulting services for an **annual fee** of **$177,697**, with her agreement renewed for successive one-year terms[136](index=136&type=chunk) - **Costs incurred** under the Catalyst Transaction Advisory Services Agreement were **$20,000** for **Q1 2025**, **down from** **$56,272** for **Q1 2024**[138](index=138&type=chunk) Related Party Balances (USD) | Metric | March 31, 2025 (USD) | December 31, 2024 (USD) | | :-------------------------- | :------------- | :---------------- | | Accounts receivable – related parties | $42,819 | $40,566 | | Accounts payable – related parties | $41,805 | $30,913 | [Note 11 – Segment Reporting](index=30&type=section&id=NOTE%2011%20%E2%80%93%20SEGMENT%20REPORTING) The company now reports in two segments: Sanara Surgical and Tissue Health Plus (THP), reflecting a strategic shift towards value-based wound care. Segment **Adjusted EBITDA increased** to **$0.7 million** in **Q1 2025** from **$0.3 million** in **Q1 2024**, despite THP's negative contribution - The company changed its reportable segments to Sanara Surgical and Tissue Health Plus (THP) in **Q2 2024**, **driven by** the growing importance of value-based wound care[139](index=139&type=chunk) - Sanara Surgical focuses on soft tissue repair and bone fusion products, while THP is dedicated to value-based wound care services[141](index=141&type=chunk)[143](index=143&type=chunk) Segment Adjusted EBITDA (Three Months Ended March 31) (USD) | Segment | 2025 (USD) | 2024 (USD) | Change (USD) | | :-------------------- | :----------- | :----------- | :----- | | Sanara Surgical | $2,695,058 | $1,228,480 | $1,466,578 | | THP | $(2,037,089) | $(917,059) | $(1,120,030) | | **Total** | **$657,969** | **$311,421** | **$346,548** | - All corporate and overhead expenses are currently included in the Sanara Surgical segment[145](index=145&type=chunk) [Note 12 – Subsequent Events](index=33&type=section&id=NOTE%2012%20%E2%80%93%20SUBSEQUENT%20EVENTS) On **April 1, 2025**, the company acquired CarePICS, LLC for **$2.0 million**, plus **$1.65 million** to satisfy existing indebtedness. CarePICS's mobile and web app for vascular and wound care will be integrated into the THP segment, with potential **earnout payments** to sellers based on future performance - On **April 1, 2025**, the company acquired CarePICS, LLC, a mobile and web app platform for vascular and wound care clinicians, for an aggregate **purchase price** of **$2.0 million**, plus **$1.65 million** to satisfy existing indebtedness[150](index=150&type=chunk)[151](index=151&type=chunk)[153](index=153&type=chunk) - Sellers are entitled to potential **earnout payments** over two periods (ending **March 31, 2026**, and **March 31, 2027**) and annual Purchaser Value Earnouts for **10 years**, capped at **$10.0 million**, based on patient volume[154](index=154&type=chunk)[156](index=156&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance and condition for the three months ended March 31, 2025, highlighting **revenue growth**, segment performance, recent strategic developments, and liquidity, while also outlining forward-looking statements and associated risks [Cautionary Statement Regarding Forward-Looking Statements](index=35&type=section&id=CAUTIONARY%20STATEMENT%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section advises readers that the report contains forward-looking statements about future events and financial performance, which are subject to various risks and uncertainties that could cause actual results to differ materially from projections, and the company does not undertake to update these statements - Forward-looking statements relate to future events or financial/operating performance, including value-based wound and skincare services and THP platforms[159](index=159&type=chunk) - These statements are subject to risks such as shortfalls in **revenue growth**, ability to implement strategies, capital requirements, debt compliance, product development, market acceptance, and intellectual property protection[159](index=159&type=chunk) - The company does not assume any obligation to update forward-looking statements, except as required by law[160](index=160&type=chunk) [Overview](index=36&type=section&id=OVERVIEW) Sanara MedTech is a medical technology company focused on improving clinical outcomes and reducing healthcare costs in surgical, chronic wound, and skincare markets. It operates through two segments, Sanara Surgical and Tissue Health Plus (THP), with a recent strategic shift to emphasize value-based wound care - Sanara MedTech aims to provide innovative and comprehensive surgical, wound, and skincare solutions[161](index=161&type=chunk) - The company's business is managed through two reportable segments: Sanara Surgical and THP, reflecting a change in **Q2 2024** **due to** the growing importance of value-based wound care[162](index=162&type=chunk) - Sanara Surgical markets soft tissue repair (e.g., CellerateRX Surgical, BIASURGE) and bone fusion products (e.g., BiFORM, ALLOCYTE Plus) for sterile environments[163](index=163&type=chunk) - THP is focused on value-based wound care services, aiming to offer programs to payers and risk-bearing entities to reduce hospitalizations and improve patient quality of life[166](index=166&type=chunk)[167](index=167&type=chunk) [Summary of Our Product, Service and Technology Offerings and Development Programs](index=37&type=section&id=Summary%20of%20Our%20Product%2C%20Service%20and%20Technology%20Offerings%20and%20Development%20Programs) This section details Sanara Surgical's product portfolio, including CellerateRX Surgical, BIASURGE, FORTIFY TRG, FORTIFY FLOWABLE, and other surgical products. It also outlines THP's planned value-based wound care services, which include a Care Hub, MSO Network, and a technology platform leveraging AI and machine learning, along with strategic alliances and license agreements - Sanara Surgical products include CellerateRX Surgical (hydrolyzed collagen for surgical wounds), BIASURGE (antimicrobial surgical solution), FORTIFY TRG (tissue repair graft), FORTIFY FLOWABLE (extracellular matrix for irregular wounds), and other bone fusion products[169](index=169&type=chunk)[171](index=171&type=chunk)[172](index=172&type=chunk)[173](index=173&type=chunk)[174](index=174&type=chunk) - THP's comprehensive approach includes a Care Hub (virtual patient monitoring), an MSO Network (third-party providers for patient-side care), and a Technology Platform (scaling workflows with AI/ML, managing program economics and standards of care)[177](index=177&type=chunk)[178](index=178&type=chunk) - The company has a **50/50 strategic alliance** with InfuSystem Holdings, Inc. (SI Healthcare Technologies) for wound care solutions and a license agreement with Tufts University for collagen peptides[179](index=179&type=chunk)[180](index=180&type=chunk) [Recent Developments](index=39&type=section&id=RECENT%20DEVELOPMENTS) **Recent developments** include the amendment and third borrowing of **$12.25 million** under the CRG **Term Loan**, an initial **€3.0 million** cash **investment** and conversion of a **€1.0 million** loan into **equity** in BMI for **exclusive U.S. distribution rights**, and the post-quarter acquisition of CarePICS for **$2.0 million** plus debt satisfaction - On **March 19, 2025**, the CRG **Term Loan** Agreement was amended to allow two additional borrowings, and on **March 31, 2025**, the company borrowed an additional **$12.25 million** (Third Borrowing)[181](index=181&type=chunk) - On **January 16, 2025**, the company invested **€3.0 million** cash and converted a **€1.0 million** loan into BMI **equity**, acquiring **exclusive U.S. marketing and distribution rights** for OsStic and ARC products[182](index=182&type=chunk)[183](index=183&type=chunk) - On **April 1, 2025**, the company acquired CarePICS, LLC for **$2.0 million**, plus **$1.65 million** to satisfy existing indebtedness, integrating its virtual platform into the THP segment[184](index=184&type=chunk) [Components of Results of Operations](index=40&type=section&id=COMPONENTS%20OF%20RESULTS%20OF%20OPERATIONS) This section details the components of the company's financial results, including **revenue** sources **primarily from** soft tissue repair and bone fusion products, **cost of goods sold**, and operating expenses such as selling, general and administrative (SG&A), research and development (R&D), and depreciation and **amortization**. Other income (expense) **primarily covers** **interest** - **Revenue** is **primarily from** sales of soft tissue repair and bone fusion products, with CellerateRX Surgical being the substantial majority[185](index=185&type=chunk) Net Revenue by Product Category (Three Months Ended March 31) (USD) | Product Category | 2025 (USD) | 2024 (USD) | | :----------------------- | :----------- | :----------- | | Soft tissue repair products | $20,532,440 | $16,082,292 | | Bone fusion products | $2,901,656 | $2,454,346 | | **Total Net Revenue** | **$23,434,096** | **$18,536,638** | - **Cost of goods sold** includes acquisition **costs**, raw materials, and royalties, contributing to **gross profit**[188](index=188&type=chunk) - Operating expenses comprise SG&A (salaries, commissions, legal, audit, rent), R&D (personnel, contracted services, materials, pipeline investments), and depreciation and **amortization**[189](index=189&type=chunk)[190](index=190&type=chunk)[191](index=191&type=chunk) [Results of Operations](index=42&type=section&id=RESULTS%20OF%20OPERATIONS) For **Q1 2025**, **net revenue increased** **26%** to **$23.4 million**, and **gross profit rose** **30%** to **$21.6 million**, **driven by** soft tissue repair product sales. However, **net loss doubled** to **$3.5 million** **due to** a **32% increase** in SG&A, higher R&D, and a significant **increase** in **interest expense** related to the CRG **Term Loan**. Segment **Adjusted EBITDA improved** to **$0.7 million** Key Financial Results (Three Months Ended March 31) (USD) | Metric | 2025 (USD) | 2024 (USD) | Change (USD) | % Change | | :----------------------------------- | :----------- | :----------- | :----- | :------- | | Net Revenue | $23,434,096 | $18,536,638 | $4,897,458 | 26% | | Gross Profit | $21,599,129 | $16,646,592 | $4,952,537 | 30% | | Selling, general and administrative | $21,440,610 | $16,192,259 | $5,248,351 | 32% | | Research and development | $1,114,138 | $946,298 | $167,840 | 18% | | Other expense | $1,447,354 | $267,336 | $1,180,018 | 441% | | Net Loss | $(3,527,383) | $(1,799,043) | $(1,728,340) | 96% | | Segment Adjusted EBITDA | $657,969 | $311,421 | $346,548 | 111% | - The **increase** in **net revenue** was **primarily due to increased sales** of soft tissue repair products (CellerateRX Surgical and BIASURGE) and bone fusion products, **driven by** market penetration and distribution network expansion[195](index=195&type=chunk) - Higher **net loss** was **mainly due to increased costs** for the THP platform buildout and higher **interest expense** from the CRG **Term Loan**, **partially offset by** improved **gross profit**[203](index=203&type=chunk) - THP segment contributed **$(2.0) million** to Segment **Adjusted EBITDA** in **Q1 2025**, compared to **$(0.9) million** in **Q1 2024**, reflecting **increased investment** in its platform and infrastructure[207](index=207&type=chunk) [Liquidity and Capital Resources](index=44&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) **Cash on hand increased** to **$20.7 million** at **March 31, 2025**. The company expects to fund future operations and **growth**, including THP **investments** and potential acquisitions, through existing cash, operational cash flows, and available CRG **Term Loan** proceeds. Key activities include the Applied Asset Purchase, CRG **Term Loan** borrowings, BMI **investment**, and the CarePICS acquisition - **Cash on hand** was **$20.7 million** at **March 31, 2025**, **up from** **$15.9 million** at **December 31, 2024**[208](index=208&type=chunk) - The company expects **Q1 2025 cash investment** in THP to be **$7.5 million** to **$8.5 million**, with **Q2 2025 investment** projected at **$4.0 million** to **$5.0 million**[208](index=208&type=chunk) - As of **March 31, 2025**, **$12.25 million** was available for future borrowing under the CRG **Term Loan**[209](index=209&type=chunk) - The Applied Asset Purchase involved an initial **$15.25 million**, including cash and stock, and an additional **$10.0 million** Applied **Earnout** based on sales performance[210](index=210&type=chunk)[212](index=212&type=chunk) - The CRG **Term Loan** has **$42.8 million** principal outstanding as of **March 31, 2025**, with a **13.25% interest rate** and a maturity date of **March 30, 2029**[217](index=217&type=chunk) - The BMI **investment** included an initial **€3.0 million** cash and **€1.0 million** convertible loan conversion for **6.67% equity**, with an agreement for an additional **€4.0 million** upon milestones[225](index=225&type=chunk) - The CarePICS acquisition on **April 1, 2025**, involved a **$2.0 million purchase price** and **$1.65 million** for debt, with potential **earnout payments** to sellers[226](index=226&type=chunk)[227](index=227&type=chunk)[230](index=230&type=chunk) - **Net cash used** in operating activities was **$2.0 million** in **Q1 2025**, **net cash used** in investing activities was **$5.2 million**, and **net cash provided** by financing activities was **$12.0 million**[231](index=231&type=chunk)[232](index=232&type=chunk)[233](index=233&type=chunk) [Material Transactions with Related Parties](index=49&type=section&id=MATERIAL%20TRANSACTIONS%20WITH%20RELATED%20PARTIES) The company has ongoing **material transactions** with related parties, including a consulting agreement with director Ann Beal Salamone for **$177,697** annually, and a transaction advisory services agreement with Catalyst, incurring **$20,000** in **Q1 2025**. Related party **receivables** and **payables** were **$42,819** and **$41,805**, respectively, at **March 31, 2025** - Ann Beal Salamone, a director, has a consulting agreement for **$177,697** annually, renewed for successive one-year terms[234](index=234&type=chunk) - The company incurred **$20,000** in **costs** with Catalyst, a related party, for transaction advisory services in **Q1 2025**[236](index=236&type=chunk) Related Party Balances (USD) | Metric | March 31, 2025 (USD) | December 31, 2024 (USD) | | :-------------------------- | :------------- | :---------------- | | Accounts receivable – related parties | $42,819 | $40,566 | | Accounts payable – related parties | $41,805 | $30,913 | [Impact of Inflation and Changing Prices](index=50&type=section&id=IMPACT%20OF%20INFLATION%20AND%20CHANGING%20PRICES) **Inflation** and changing prices have not **materially impacted** the company's historical results and are not anticipated to have a **material impact** on future operations - **Inflation** and changing prices have not had a **material impact** on historical results of operations[238](index=238&type=chunk) - The company does not anticipate a **material impact** from **inflation** and changing prices on future results of operations[238](index=238&type=chunk) [Critical Accounting Estimates](index=50&type=section&id=CRITICAL%20ACCOUNTING%20ESTIMATES) The preparation of financial statements requires management to make estimates and assumptions, which could differ from actual results. Significant estimates include **revenue** and expense accruals, fair value measurements of assets and liabilities, and **purchase price** allocation. **No significant changes** to these estimates have occurred since **December 31, 2024** - **Critical accounting estimates** include **revenue** and expense accruals, fair value measurement of assets and liabilities, and allocation of **purchase price** to acquired assets[239](index=239&type=chunk) - **No significant changes** to **critical accounting estimates** have occurred since **December 31, 2024**[239](index=239&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=50&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, Sanara MedTech Inc. is not required to provide quantitative and qualitative disclosures about market risk - The company is not required to provide market risk disclosures as a smaller reporting company[240](index=240&type=chunk) [Item 4. Controls and Procedures](index=50&type=section&id=Item%204.%20Controls%20and%20Procedures) The company's disclosure controls and procedures were evaluated as **effective** as of **March 31, 2025**. There were **no material changes** in internal control over financial reporting during the quarter - Disclosure controls and procedures were evaluated as **effective** as of **March 31, 2025**[241](index=241&type=chunk) - **No material changes** in internal control over financial reporting occurred during the quarter ended **March 31, 2025**[242](index=242&type=chunk) Part II – Other Information [Item 1. Legal Proceedings](index=50&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any **material pending legal proceedings** - There are **no material pending legal proceedings** to which the company is a party[244](index=244&type=chunk) [Item 1A. Risk Factors](index=51&type=section&id=Item%201A.%20Risk%20Factors) There were **no material changes** to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended **December 31, 2024** - **No material changes** to risk factors were disclosed compared to the Annual Report on Form 10-K for **December 31, 2024**[245](index=245&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=51&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) **No unregistered sales** of **equity securities** occurred during the quarter ended **March 31, 2025**, that were not previously reported - **No unregistered sales** of **equity securities** were made during **Q1 2025** that were not previously reported[246](index=246&type=chunk) [Item 3. Defaults Upon Senior Securities](index=51&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported **no defaults** upon senior securities - There were **no defaults** upon senior securities[247](index=247&type=chunk) [Item 4. Mine Safety Disclosures](index=51&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - This item is not applicable to the company[248](index=248&type=chunk) [Item 5. Other Information](index=51&type=section&id=Item%205.%20Other%20Information) No director or officer adopted, modified, or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three months ended **March 31, 2025** - No director or officer adopted, modified, or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during **Q1 2025**[249](index=249&type=chunk) [Item 6. Exhibits](index=52&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the report, including various agreements, certificates, and certifications, with details on incorporation by reference and confidentiality - Exhibits include asset **purchase agreements**, merger agreements, **term loan** agreements, share subscription agreements, and certifications[251](index=251&type=chunk)[252](index=252&type=chunk)[253](index=253&type=chunk) - Certain schedules and exhibits have been omitted or contain excluded confidential information[253](index=253&type=chunk) Signatures [Signatures](index=54&type=section&id=SIGNATURES) The report was duly signed on behalf of Sanara MedTech Inc. by Elizabeth B. Taylor, Chief Financial Officer, on **May 14, 2025** - The report was signed by Elizabeth B. Taylor, Chief Financial Officer, on **May 14, 2025**[257](index=257&type=chunk)

Financial Performance - Sanara MedTech Inc. reported a quarterly loss of $0.41 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.31, and compared to a loss of $0.21 per share a year ago, indicating a significant decline in performance [1] - The company posted revenues of $23.43 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 5.32%, and showing an increase from year-ago revenues of $18.54 million [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.29 on revenues of $25.35 million, and for the current fiscal year, it is -$1.78 on revenues of $107.2 million [7] - The estimate revisions trend for Sanara MedTech is mixed, leading to a Zacks Rank 3 (Hold), suggesting that the shares are expected to perform in line with the market in the near future [6] Market Performance - Sanara MedTech shares have increased by approximately 5.7% since the beginning of the year, outperforming the S&P 500, which gained only 0.1% [3] - The outlook for the industry, specifically the Medical - Products sector, is currently in the bottom 31% of over 250 Zacks industries, which may impact the stock's performance [8]

Financial Data and Key Metrics Changes - Sonera Surgical segment delivered net revenue of $23.4 million, representing a 26% year-over-year growth, driven primarily by a 28% increase in sales of soft tissue repair products to $20.5 million [5][6] - Gross profit increased by $5 million or 30% to $21.6 million, with gross margin rising approximately 240 basis points to 92% of net revenue [21][22] - Net loss for the first quarter was $3.5 million or $0.41 per diluted share, compared to a net loss of $1.8 million or $0.21 per diluted share last year [23][24] - Adjusted EBITDA for the first quarter was $700,000, an increase of 111% year-over-year [24] Business Line Data and Key Metrics Changes - In the Tissue Health Plus segment, the company continues to invest in developing a value-based wound care strategy, preparing to launch a pilot program with a wound care provider later in the second quarter [6][20] - The Synera Surgical segment generated operating income of $800,000 in the first quarter, an increase of $1 million year-over-year [22][24] - Tissue Health Plus segment generated a net loss of $2.9 million compared to a net loss of $1.4 million last year [24] Market Data and Key Metrics Changes - The company expanded its distributor network to over 400 partners, up from over 250 in the first quarter of 2024, enhancing sales coverage in key markets across the US [10][11] - Products were sold in over 1,300 healthcare facilities, compared to over 1,080 facilities in the prior year period [11][12] Company Strategy and Development Direction - The company is focused on three commercial initiatives: advancing distributor relationships, selling into new healthcare facilities, and increasing penetration in existing facilities [10][12] - The company aims to onboard and train additional distributor representatives to increase sales within existing distributor relationships [14][15] - The company is also pursuing financial partners to invest in the execution of its Tissue Health Plus strategy [7][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong start to 2025 and remains focused on delivering net revenue growth, particularly in the Synera Surgical segment [26] - The company does not anticipate a material impact from tariffs on its operations in 2025, as most products are manufactured in the US [27] Other Important Information - The company amended the terms of its debt facility to provide increased financial flexibility [8] - The THP CoPilot software platform was released, designed to standardize wound care and reduce administrative burdens for clinicians [17][18] Q&A Session Summary Question: Can you provide more insight into penetration rates and strategies for improvement? - Management indicated a coupled approach between territory managers and distributor expansion to penetrate existing accounts deeper [30][31] Question: Are there any reorder rates available for the products? - Management noted that while specific reorder rates are not disclosed, once surgeons gain comfort with the products, they tend to continue using them for more procedures [32] Question: How should gross margin be viewed for the remainder of 2025? - Management suggested that while there may not be significant additional leverage on gross margin, consistency in modeling is advisable [36][37] Question: What metrics will define success for the initial pilot program in Tissue Health Plus? - Success will be measured through clinician adherence to protocols, reduction in post-encounter time, staff productivity, and user satisfaction metrics [41][44]

Financial Data and Key Metrics Changes - The company reported net revenue of $23.4 million for Q1 2025, representing a 26% year-over-year growth, driven primarily by a 28% increase in sales of soft tissue repair products to $20.5 million [5][6] - Gross profit increased by $5 million or 30% to $21.6 million, with gross margin rising approximately 240 basis points to 92% of net revenue [22] - The net loss for Q1 2025 was $3.5 million or $0.41 per diluted share, compared to a net loss of $1.8 million or $0.21 per diluted share in the previous year [24] Business Line Data and Key Metrics Changes - In the Synera Surgical segment, adjusted EBITDA increased by $1.5 million year-over-year to $2.7 million, while the net loss increased by $200,000 to $600,000 [6][24] - The Tissue Health Plus segment reported a net loss of $2.9 million, up from a net loss of $1.4 million in the previous year, with a segment adjusted EBITDA loss of $2 million compared to a loss of $900,000 last year [24] Market Data and Key Metrics Changes - The company expanded its distributor network to over 400 partners, up from over 250 in Q1 2024, enhancing sales coverage in key markets across the U.S. [10] - The number of healthcare facilities served increased to over 1,300, compared to over 1,080 facilities in the prior year [11] Company Strategy and Development Direction - The company is focused on enhancing its new product pipeline and has secured distribution rights to two additional technologies [7] - The strategy includes investing in the Tissue Health Plus segment and launching a pilot program with a wound care provider later in Q2 2025 [6][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth opportunities ahead, particularly in the Synera Surgical segment, and expects improvements in profitability for 2025 [27] - The company is actively seeking financial partners to support the execution of its Tissue Health Plus strategy [27] Other Important Information - The company amended the terms of its debt facility to provide increased financial flexibility [7] - As of March 31, 2025, the company had $20.7 million in cash and $42.8 million in principal debt obligations outstanding [25] Q&A Session Summary Question: Can you provide more details on your penetration rates and strategy for improving penetration at existing facilities? - The company employs a coupled approach between regional sales managers and distributor expansion to penetrate existing accounts deeper [31] Question: Are there any signals on reorder rates for your products? - The company has not provided specific reorder rates but noted that once surgeons gain comfort with their products, they tend to continue using them across more procedures [33] Question: How should we think about gross margin cadence through the remainder of 2025? - Management indicated that while there may not be significant further leverage on gross margins, consistency with past modeling is advisable [38] Question: What metrics will define success for the pilot program in Tissue Health Plus? - Success will be measured through clinician-facing metrics, operational metrics, and adoption metrics, including protocol adherence and clinician satisfaction [41][45]

Financial Performance - Net revenue for Q1 2025 increased by 26% year-over-year to $23.4 million, up from $18.5 million in Q1 2024[5] - Gross profit for Q1 2025 was $21.6 million, a 30% increase from $16.6 million in Q1 2024, with a gross margin of 92%[9] - Net revenue for the three months ended March 31, 2025, was $23,434,096, representing a 26.5% increase from $18,536,638 in the same period of 2024[24] - Gross profit for the same period was $21,599,129, up from $16,646,592, indicating a gross margin improvement[24] - Segment Adjusted EBITDA for the total was $657,969 for Q1 2025, compared to $311,421 in Q1 2024, reflecting an increase of approximately 111%[32] - Segment Adjusted EBITDA as a percentage of Net Revenue for Q1 2025 was 2.8%, up from 1.7% in Q1 2024, showing improved operational efficiency[32] Expenses and Losses - Operating expenses increased by 30% to $23.7 million, driven by a 32% rise in selling, general and administrative expenses[10] - Net loss for Q1 2025 was $3.5 million, compared to a net loss of $1.8 million in Q1 2024[13] - Operating loss increased to $2,080,029 for Q1 2025 compared to a loss of $1,531,707 in Q1 2024[24] - Net loss attributable to Sanara MedTech shareholders was $3,527,177 for Q1 2025, compared to $1,764,184 in Q1 2024, reflecting a significant increase in losses[24] - The net loss for the three months ended March 31, 2025, was $(3,527,383), compared to $(1,799,043) in the prior year, indicating a significant increase in losses[32] - Net Loss as a percentage of Net Revenue for Q1 2025 was (15.1)%, compared to (9.7)% in Q1 2024, indicating a worsening loss margin[32] Cash and Debt Management - As of March 31, 2025, the company had $20.7 million in cash and $42.8 million in principal debt obligations[15] - Total current assets rose to $36,842,548 as of March 31, 2025, compared to $33,305,988 at the end of 2024, driven by an increase in cash and inventory[22] - Long-term debt increased to $43,402,223 as of March 31, 2025, up from $30,689,290 at the end of 2024, indicating higher leverage[22] - Cash at the end of the period was $20,687,806, a significant increase from $15,878,295 at the end of 2024, reflecting improved cash flow management[26] - Total liabilities increased to $59,711,004 as of March 31, 2025, compared to $49,180,030 at the end of 2024, indicating a rise in financial obligations[22] Product Sales and Initiatives - Sales of soft tissue repair products rose by 28% to $20.5 million, while bone fusion products increased by 18% to $2.9 million[8] - Sanara plans to launch its first pilot program for the Tissue Health Plus initiative in Q2 2025 and is seeking financial partners for this strategy[6] - The company aims to address the large surgical greenfield opportunity and improve profitability in its Sanara Surgical segment throughout 2025[6] Research and Development - Research and development expenses for Q1 2025 were $1,114,138, compared to $946,298 in Q1 2024, highlighting continued investment in innovation[24] Other Financial Metrics - Adjusted EBITDA for Q1 2025 was $0.7 million, up from $0.3 million in Q1 2024, with the Sanara Surgical segment contributing $2.7 million[14] - Interest expense for Q1 2025 was $1,317,092, compared to $267,336 in Q1 2024, highlighting a significant increase in financing costs[32] - Noncash share-based compensation for Q1 2025 totaled $1,304,904, compared to $803,386 in Q1 2024, indicating an increase of approximately 62%[32] - Acquisition costs for Q1 2025 amounted to $308,684, reflecting ongoing investment in growth strategies[32] - Depreciation and amortization expenses for Q1 2025 were $1,124,410, compared to $1,105,420 in Q1 2024, showing a slight increase[32] - The share of losses from equity method investments was $143,608 for Q1 2025, with no losses reported in Q1 2024, indicating new challenges in equity investments[32]

Core Insights - Sanara MedTech Inc. reported a 26% year-over-year increase in net revenue for Q1 2025, reaching $23.4 million compared to $18.5 million in Q1 2024 [6][10][15] - The company experienced a net loss of $3.5 million in Q1 2025, which is an increase from a net loss of $1.8 million in the same period last year [15][27] - Adjusted EBITDA improved to $0.7 million in Q1 2025, up from $0.3 million in Q1 2024, indicating better operational performance [16][32] Financial Performance - Net revenue increased by $4.9 million, driven by a $4.5 million (28%) rise in soft tissue repair products and a $0.4 million (18%) increase in bone fusion products [10][11] - Gross profit for Q1 2025 was $21.6 million, a 30% increase from $16.6 million in Q1 2024, with a gross margin of 92% compared to 90% in the previous year [11][12] - Operating expenses rose to $23.7 million, a 30% increase from $18.2 million in Q1 2024, primarily due to higher selling, general, and administrative expenses [12][13] Operational Developments - The company executed an exclusive license and distribution agreement with Biomimetic Innovations Ltd, acquiring U.S. marketing rights for a new bone void filler product [7][8] - Sanara expanded its executive leadership team with new appointments, including a new Chief Financial Officer [7][8] - The company is preparing to launch a pilot program for its Tissue Health Plus initiative in collaboration with a wound care provider group [8] Cash and Debt Position - As of March 31, 2025, Sanara had $20.7 million in cash and $42.8 million in principal debt obligations, with an additional borrowing capacity of $12.25 million [17][24] - The company borrowed $12.25 million under its term loan agreement, which may be used for acquisitions and working capital [7][17] Market Focus - Sanara MedTech is focused on developing transformative technologies in the surgical, chronic wound, and skincare markets, aiming to improve clinical outcomes and reduce healthcare costs [20][21] - The company markets a range of products in the advanced wound care and surgical tissue repair markets, with a strong emphasis on expanding its distribution network [20][21]