Revenue Performance - Q4 2024 revenues reached $10.3 million, a 47% increase from Q4 2023, marking an all-time quarterly record for the company[1] - Full year 2024 revenues totaled $32.6 million, up 60% from $20.4 million in 2023, exceeding the full year guidance of 50% growth[10] - Total revenue for 2024 increased to $32,634,000, representing a 60% growth compared to $20,398,000 in 2023[31] Profitability Metrics - Gross margin for Q4 2024 was 77.9%, compared to 69.1% in Q4 2023, and full year gross margin was 75.2%, up from 70.4% in 2023[2][3] - Operating income for Q4 2024 was $2.5 million, a 143% increase from Q4 2023, while full year operating income was $5.4 million, an increase of $6.0 million compared to 2023[4][10] - Gross margin improved to $24,550,000, up from $14,363,000 in the previous year, indicating a significant increase in profitability[31] - Operating income for 2024 was $5,417,000, a turnaround from an operating loss of $540,000 in 2023[31] Sales and Product Performance - The company sold 135 UltraMist® systems in Q4 2024, up from 79 in Q4 2023, and total systems sold in 2024 reached 374, compared to 211 in 2023[5][10] - UltraMist® consumables revenue increased by 59% to $5.9 million in Q4 2024, representing 58% of overall revenues for the quarter[5] Future Guidance - The company forecasts Q1 2025 revenue between $8.4 million and $9.0 million, indicating a 45-55% increase from Q1 2024, and full year 2025 revenue guidance of $48-50 million, a 47-53% increase from 2024[4][8] Financial Position - Total current assets rose to $18,397,000, a 88% increase from $9,784,000 in 2023[28] - Total liabilities decreased to $42,836,000, down 35% from $65,594,000 in 2023[29] - Cash and cash equivalents at the end of 2024 were $10,237,000, a substantial increase from $1,797,000 in 2023[28] Net Loss and Stock Activity - The company experienced a net loss of $12.7 million in Q4 2024, compared to a net profit of $18.2 million in Q4 2023, primarily due to changes in the fair value of derivative liabilities[5] - Net loss for 2024 was $31,372,000, compared to a net loss of $25,807,000 in 2023, reflecting ongoing challenges[31] - Basic and diluted net loss per share improved to $(7.03) from $(12.19) in 2023, indicating a relative improvement in performance[31] - The company issued 1,248,489 shares of common stock, raising $10,300,000 in 2024[35] - Stock-based compensation increased to $1,514,000 in 2024, compared to no expenses recorded in 2023[35] Capital Structure Changes - The company completed a 1-for-375 reverse stock split and raised $10.3 million in a private placement, simplifying its capital structure[9] EBITDA Performance - Adjusted EBITDA for Q4 2024 was $3.7 million, compared to $0.7 million in Q4 2023, reflecting an improvement of $3.0 million[5]

Financial Performance - Total revenues for the year ended December 31, 2024, reached $32.6 million, a 60% increase from $20.4 million in 2023[15]. - The company incurred a net loss of $31.4 million and $25.8 million for the years ended December 31, 2024, and 2023, respectively[94]. - Gross margins increased to 75% in 2024, up from 70% in 2023[188]. - Operating income surged by 1103% to $5.4 million for the year ended December 31, 2024, compared to an operating loss of $0.5 million in 2023[188]. - The net loss for the year ended December 31, 2024, was $31.4 million, or $7.03 per basic and diluted share, compared to a net loss of $25.8 million, or $12.19 per share, in 2023[189]. - The company had an accumulated deficit of $251 million as of December 31, 2024, indicating ongoing financial challenges[203]. - Cash flows from operating activities improved to $2.5 million in 2024, compared to a negative $4.5 million in 2023[205]. - The company received proceeds of $12.1 million from financing activities in 2024, compared to $6.0 million in 2023, while paying off $5.0 million in outstanding debt[207]. - Management is actively seeking to refinance significant debt due in September 2025 to improve liquidity and support ongoing operations[209]. Product and Market Overview - UltraMIST systems and consumables accounted for approximately 98% of 2024 revenues, up from 90% in 2023[15]. - Over 1,000 UltraMIST systems were in the field as of December 31, 2024[27]. - The wound care market in the United States exceeds $45 billion annually, with expectations for continued expansion due to an aging population and rising incidences of chronic conditions[31]. - The UltraMIST system is cleared by the FDA for various wound types, including diabetic foot ulcers and surgical wounds[19]. - Consumables revenues constituted approximately 61% of total revenues in 2024, expected to remain the largest revenue stream[27]. - The company aims to improve patient outcomes by providing cost-effective, easy-to-use technology that integrates into healthcare workflows[38]. Regulatory and Compliance - The FDA requires that all medical devices, including those from the Company, must receive approval or clearance before marketing in the U.S., which involves extensive regulation[63]. - The Company is currently registered as a Small Business Manufacturer with the FDA, which allows for reduced fees, but may lose this status if revenues exceed a certain threshold[68]. - The Company has successfully completed a MDSAP surveillance audit in September 2024, with the certificate valid for three years[75]. - The Company is subject to ongoing FDA inspections to ensure compliance with regulatory requirements, which also apply to suppliers and contract manufacturers[71]. - The company is subject to extensive regulation by governmental authorities, including the FDA, which could disrupt production or distribution if compliance issues are identified[124]. - Regulatory approval for products may be withdrawn at any time, which could lead to significant operational disruptions[127]. - The company must obtain adequate reimbursement for its approved products; failure to do so may limit market viability[130]. Competition and Market Position - The Company believes its PACE technology has a competitive advantage in the advanced wound care market compared to existing technologies, potentially providing better value for patients and caregivers[60]. - UltraMIST is considered to have a competitive edge over other low-frequency ultrasound technologies due to its broad medical indications and patient tolerability, especially for painful wounds[62]. - The company faces competition from established medical device, pharmaceutical, and biotechnology companies, which have greater financial resources and expertise[105]. - The company relies on intellectual property protection, and any failure to adequately protect these rights could materially affect its competitive position[147]. Operational Challenges - The company has identified material weaknesses in its internal control over financial reporting, which could result in material misstatements of its consolidated financial statements[97]. - The company has experienced negative operating cash flows since inception, primarily funded through sales of capital stock and promissory notes[101]. - The company depends on suppliers for product component materials, with many components produced by a single supplier, posing a risk to production continuity[106]. - The company may experience difficulties with manufacturing yields and quality control, which could delay product availability and increase expenses[115]. - Future growth will impose significant added responsibilities on management, including the need to recruit and integrate additional employees[116]. Legal and Compliance Risks - Violations of the Federal Anti-Kickback Statute could result in substantial penalties and exclusion from federal healthcare programs, impacting the company's operations[136]. - The company is subject to potential liability under the Federal False Claims Act if it fails to comply with documentation, coding, and billing rules[137]. - The company faces risks related to investigations or litigation alleging violations of the Federal Anti-Kickback Statute and False Claims Act, which could adversely affect its business operations[138]. - Noncompliance with HIPAA and state-specific privacy laws may increase operational costs and could have a material adverse effect on the company's financial condition[139]. - The company anticipates incurring substantial operational and financial costs related to breach notifications under HIPAA and the HITECH Act[140]. - The company is subject to various governmental reviews and audits, which could result in significant costs and adversely impact its financial condition[143]. - The medical device industry is heavily regulated, and failure to comply with FDA regulations could lead to enforcement sanctions and recalls, adversely affecting the company's operations[144]. Employee and Corporate Structure - The company has a total of 46 full-time employees in the United States as of December 31, 2024, with seven engaged in research and development[89]. - The company has not experienced a material information security breach incident, but future incidents could have a material impact on its business strategy[176]. - The company is subject to various legal proceedings but does not believe any will have a material adverse effect on its business[178]. Future Plans and Strategies - The company plans to build a direct sales force and distribution network to market UltraMIST in the U.S. and assess potential international expansion[34]. - The company plans to obtain additional capital in 2025 through the issuance of common or preferred stock, convertible securities, or debt[95]. - The company may seek to expand operations and product lines through acquisitions, which would likely increase capital requirements[104]. - Less than 1% of the company's revenue comes from international sources, indicating limited current international operations[118].

Financial Data and Key Metrics Changes - The company reported record quarterly revenue of $9.4 million for Q3 2024, representing an 89% increase year-over-year and a 31% sequential increase from Q2 2024 [5][11] - Gross margin improved to 75.5%, up from 71.5% in the same period last year, primarily due to a line transfer at a new contract manufacturer and positive pricing impacts [12] - Operating income for Q3 2024 was $2 million, an improvement of $2.5 million compared to the same period last year [12] - The net loss decreased to $20.7 million from $23.7 million year-over-year, attributed to a change in the fair value of derivative liabilities and increased operating income [13] Business Line Data and Key Metrics Changes - Consumables revenue, which constitutes approximately 58% of total revenue, grew 75% year-over-year and 14% sequentially [5] - Ultimate Systems sales saw a significant increase of 144% year-over-year and 74% sequentially, indicating strong demand and successful sales strategies [6] Market Data and Key Metrics Changes - The company is focusing on the U.S. market, where it has seen substantial growth, while international sales remain sluggish, primarily associated with the dermaPACE and profile product line [38] Company Strategy and Development Direction - The company aims to transition from a small to a medium-sized business by engaging with larger, more sophisticated customers, which presents both opportunities and challenges in revenue forecasting [8][10] - There is a focus on maintaining multiple sourcing for manufacturing to avoid single points of failure, with plans to enhance gross margins through new manufacturing processes [21][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, highlighting a strong customer pipeline and the potential for continued growth, particularly in the U.S. market [26] - The company is guiding for Q4 revenue between $9.7 million and $10.5 million, which would represent a 40% to 50% growth compared to the same quarter last year [15] Other Important Information - The company has successfully repaid certain debts and regained compliance with loan covenants, simplifying its capital structure [7] - A full-time employee has been hired to address material weaknesses in internal controls over reporting, indicating a commitment to improving operational integrity [40] Q&A Session Summary Question: Can you discuss the transition to new manufacturers? - The company has successfully transitioned to two new contract manufacturers for systems, achieving a production rate of 25 to 30 systems per week [20] Question: How many systems sold this quarter were from the new manufacturing? - Only a few systems were produced by the new manufacturers by the end of Q3, with a more significant impact expected in Q4 [22] Question: Can you provide details on the customer pipeline? - The current customer pipeline is the best seen, with larger and more sophisticated customers showing interest, although the sales process is more complex [26] Question: What is the outlook for operating expenses? - Operating expenses are expected to remain flat in Q4 compared to Q3, with modest growth anticipated in 2025 [33] Question: What is the status of the company's debt obligations? - The company has repaid a $1.3 million note and is no longer in default on its debt obligations [37] Question: What is the company's focus on international sales? - The company is primarily focused on the U.S. market due to its size and potential, with limited focus on international sales for the time being [38]

Financial Performance - Q3 2024 revenues reached $9.4 million, an increase of 89% compared to $5.0 million in Q3 2023, marking an all-time quarterly record for the company[1][5] - Gross margin for Q3 2024 was 75.5%, up from 71.5% in Q3 2023[2][5] - Operating income for Q3 2024 was $2.0 million, an increase of $2.5 million compared to a loss of $0.5 million in Q3 2023[2][5] - Year-to-date net loss for 2024 was $18.6 million, significantly improved from a net loss of $44.0 million in the same period of 2023[5] - Adjusted EBITDA for Q3 2024 was $2.1 million, compared to a loss of $0.3 million in Q3 2023, reflecting an improvement of $2.4 million[5][21] - Revenue for the three months ended September 30, 2024, was $9,360,000, representing a 88.5% increase from $4,953,000 in the same period of 2023[27] - Operating income for the three months ended September 30, 2024, was $1,953,000, a significant improvement from an operating loss of $531,000 in the same period of 2023[27] - Net loss for the three months ended September 30, 2024, was $20,657,000, a decrease from a net loss of $23,700,000 in the same period of 2023[27] - Net loss for the nine months ended September 30, 2024, was $18,624,000, an improvement from a net loss of $44,042,000 in the same period of 2023[32] Revenue Forecast - The company expects Q4 2024 revenue to be between $9.7 million and $10.5 million, representing a 40-50% increase from Q4 2023[7] - The company forecasts total revenues for 2024 to exceed $32 million, representing a 57% increase compared to the full year 2023[7] Product Sales - The company sold 124 UltraMist® systems in Q3 2024, up from 55 in Q3 2023 and 72 in Q2 2024[5] - UltraMist® consumables revenue increased by 75% to $5.4 million, accounting for 58% of total revenues in Q3 2024[5] Cash Flow and Liquidity - Net cash provided by operating activities was $1,714,000, compared to a net cash used of $3,253,000 in the prior year[32] - Cash at the end of the period increased to $3,259,000 from $1,095,000 in the previous year[32] - The company reported a net change in cash during the period of $1,462,000, compared to a decrease of $58,000 in the prior year[32] Debt and Liabilities - Total liabilities and stockholders' deficit as of September 30, 2024, was $21,844,000, down from $22,416,000 at the end of 2023[26] - The accumulated deficit increased to $(238,673,000) as of September 30, 2024, from $(220,049,000) at the end of 2023[26] - The company reported a gain on extinguishment of debt of $5,205,000 during the nine months ended September 30, 2024[27] - Cash paid for interest increased to $3,189,000 from $984,000 year-over-year[32] - The company capitalized default interest into senior secured debt amounting to $3,850,000[33] - The conversion of asset-based secured promissory notes to convertible promissory notes amounted to $4,584,000[33] - The company issued shares for the settlement of debt totaling $1,412,000[32] Stock and Shareholder Information - The company raised $10.3 million in a private placement following a 1-for-375 reverse stock split on October 18, 2024[8] - The company had 3,150,062 shares issued and outstanding as of September 30, 2024, reflecting a reverse stock split effective October 18, 2024[26] - The company reported a basic and diluted net loss per share of $6.49 for the three months ended September 30, 2024, compared to $9.95 in the same period of 2023[27] Operating Expenses - Total operating expenses for the three months ended September 30, 2024, were $5,114,000, an increase from $4,072,000 in the same period of 2023[27] - The company reported a net cash flows used in investing activities were $254,000, compared to $156,000 in the previous year[32] - Warrants issued in conjunction with convertible promissory notes totaled $3,633,000, up from $570,000 in the previous period[33]

Financial Performance - Revenue for Q3 2024 was $9,360,000, representing a 88.5% increase from $4,953,000 in Q3 2023[20] - Gross margin for Q3 2024 was $7,067,000, compared to $3,541,000 in Q3 2023, indicating a significant improvement[20] - Net loss for Q3 2024 was $20,657,000, a decrease from a net loss of $23,700,000 in Q3 2023[20] - Operating income for Q3 2024 was $1,953,000, a turnaround from an operating loss of $531,000 in Q3 2023[20] - The company achieved a gross margin of 75.5% in Q3 2024, compared to 71.5% in Q3 2023[20] - For the nine months ended September 30, 2024, total revenue was $22,308,000, up from $13,404,000 in the same period of 2023, reflecting a growth of about 66%[77]. - Revenue for the three months ended September 30, 2024, totaled $9.4 million, an increase of 89% compared to $5.0 million for the same period in 2023[93] - Net loss for the three months ended September 30, 2024, was $20.7 million, a decrease from a net loss of $23.7 million for the same period in 2023[94] - Operating income for the three months ended September 30, 2024, totaled $2.0 million, an improvement of $2.5 million compared to the same period in 2023[94] - Gross margin as a percentage of revenue increased to 76% during the three months ended September 30, 2024, from 71% in the same period of 2023[103] Assets and Liabilities - Total current assets increased slightly to $9,904,000 as of September 30, 2024, from $9,784,000 at the end of 2023[13] - Total liabilities rose to $82,107,000 as of September 30, 2024, up from $65,594,000 at the end of 2023, primarily due to increased debt[15] - The company reported a total stockholders' deficit of $60,263,000 as of September 30, 2024, compared to $43,178,000 at the end of 2023[17] - Cash and cash equivalents increased to $3,259,000 as of September 30, 2024, from $1,797,000 at the end of 2023[13] - The company’s additional paid-in capital rose to $178,397,000 as of September 30, 2024, up from $176,979,000 at the end of 2023[17] - The total accrued expenses as of September 30, 2024, amounted to $5,241 thousand, a decrease from $5,999 thousand as of December 31, 2023[52] - Senior secured debt in default as of September 30, 2024, totaled $26,613 thousand, with a carrying value of $24,426 thousand after accounting for discounts[53] - Convertible notes payable as of September 30, 2024, totaled $9,091 thousand, with a carrying value of $7,655 thousand after accounting for debt discounts[60] Cash Flow - The company experienced a net cash provided by operating activities of $1,714 thousand for the nine months ended September 30, 2024, compared to a net cash used of $3,253 thousand in the same period of 2023, indicating a significant turnaround[27] - Cash provided by operating activities during the nine months ended September 30, 2024, totaled $1.7 million, an improvement from cash used of $3.3 million in the previous year, primarily due to a $2.5 million receipt from a license agreement[112] Capital and Financing - The company plans to focus on the commercialization of its UltraMIST and PACE systems, which will require additional capital resources to support ongoing operations[35] - The company completed a private placement of approximately 1.3 million shares at a price of $8.25 per share, resulting in gross proceeds of approximately $10.3 million[85] - The company plans to use the net proceeds from the private placement for working capital and general corporate purposes, including repayment of other indebtedness[86] - The company has a 90% probability of the Note and Warrant Exchange occurring, which significantly impacts the valuation of warrant liabilities[70] - The company plans to obtain additional capital in 2024 through various means, which may result in significant dilution to existing stockholders[111] Strategic Developments - The company terminated its Merger Agreement with SEP Acquisition Corp. on June 25, 2024, which may impact future strategic directions[49] - The merger with SEP Acquisition Corp. is part of SANUWAVE's strategy to expand its market presence and enhance shareholder value through consolidation[138] - The ongoing amendments to the merger agreement suggest a dynamic approach to strategic partnerships and market positioning within the healthcare sector[138] - The company is actively pursuing new financing arrangements, as evidenced by the various agreements filed in January 2024, aimed at supporting its operational and growth initiatives[140] Internal Controls and Compliance - The company identified three material weaknesses in internal control over financial reporting as of September 30, 2024, which could lead to material misstatements in financial statements[123] - Management has engaged a third-party consultant to enhance internal controls and plans to implement these controls throughout 2024[126] - The company is collaborating with an external vendor to improve IT general controls over its enterprise resource planning system[127] - The Chief Executive Officer and Chief Financial Officer have certified compliance with SEC regulations as of November 7, 2024, ensuring accountability in financial reporting[146] - The company is focused on compliance with the Securities Exchange Act of 1934, ensuring transparency and regulatory adherence in its financial disclosures[144] Market and Customer Insights - Major customer concentration included Customer A, which accounted for 15% of revenue for the three months ended September 30, 2024[78]. - Vendor A accounted for 33% of purchases for the three months ended September 30, 2024, up from 22% in the same period of 2023[78]. Other Financial Metrics - Interest expense for the nine months ended September 30, 2024, was $6.1 million, compared to $5.1 million for the same period in 2023, indicating an increase in interest obligations[59] - Interest expense for the three months ended September 30, 2024, totaled $1.5 million, compared to $1.3 million for the same period in 2023[61] - Other expense decreased by $0.6 million to $22.6 million for the three months ended September 30, 2024, compared to the same period in 2023, primarily due to a decrease in the change in fair value of derivatives expense of $0.5 million[108] - For the nine months ended September 30, 2024, other expense decreased by $20.9 million to $21.5 million, driven by a $12.3 million decrease in the change in fair value of derivatives expense and a non-recurring gain on extinguishment of debt of $5.3 million[109]

Financial Data and Key Metrics Changes - The company achieved record quarterly revenues of $7.2 million for Q2 2024, representing a 53% increase compared to $4.7 million in Q2 2023 [12] - Gross margin for Q2 2024 was 73%, slightly down from 74% in the same period last year [12] - Operating income improved to $2 million, an increase of $1.1 million year-on-year [12] - Net income for Q2 2024 was $6.6 million, a significant turnaround from a net loss of $7.3 million in Q2 2023 [12] - Adjusted EBITDA rose to $1.5 million from $171,000 in the same quarter last year [13] Business Line Data and Key Metrics Changes - Revenue from the Ultomir systems increased by 47% year-on-year, with 788 active systems in the field at the end of Q2 2024 [7] - Revenue from the Ultamist product line grew by 62% year-on-year [7] - Consumable applicators revenue surged by 67% year-on-year and 15% sequentially from Q1 2024 [7][8] Market Data and Key Metrics Changes - The company is focusing on building a robust pipeline of large and midsized customers in the wound care space, particularly in skilled nursing and long-term care [10] - The company has already sold more systems in Q3 2024 than in all of Q3 2023, indicating strong market traction [10] Company Strategy and Development Direction - The company aims for rapid profitable growth and has increased its revenue growth guidance for Q3 2024 to 65-75% year-on-year [6][7] - The termination of the merger with SEPA was deemed necessary as it no longer served the best interests of shareholders [14] - The company is simplifying its capital structure, including a planned reverse stock split to reduce share count and improve shareholder equity [16][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's improved fundamentals and the potential for a breakout year in 2024 [17] - The focus is on being valued for the business rather than the capital structure, with plans for increased outreach to investors once the stock price is more respectable [30] Other Important Information - The company paid off long-standing debt liabilities, adding over $8 million to stockholders' equity [12] - Operating expenses increased to $3.2 million in Q2 2024, but as a percentage of revenue, they dropped to 62% from 73% in Q2 2023 [12] Q&A Session Summary Question: Can we talk about actual numbers and acquisition units or new customers? - Management did not disclose exact average selling prices but mentioned that the list price for an Ultramist system is about $35,000, and they are capturing more of it than before [20][21] Question: How is the company generating more sales in the current environment? - Management indicated that improving the capital structure is essential for enhancing the company's valuation and attracting more investors [29][30]

Financial Performance - Total revenue for Q2 2024 was $7,162,000, representing a 53.4% increase from $4,675,000 in Q2 2023[17] - Operating income for Q2 2024 was $1,992,000, compared to an operating income of $931,000 in Q2 2023[17] - Net income for Q2 2024 was $6,561,000, a significant recovery from a net loss of $7,262,000 in Q2 2023[17] - Revenue for the three months ended June 30, 2024, totaled $7.2 million, an increase of 53% compared to $4.7 million for the same period in 2023[78] - Net income for the three months ended June 30, 2024, was $6.6 million, compared to a net loss of $7.3 million for the same period in 2023[79] - Total revenue for the six months ended June 30, 2024, was $12.9 million, an increase of 53% compared to $8.5 million for the same period in 2023[78] - Net income for the six months ended June 30, 2024, was $2.0 million, compared to a net loss of $20.4 million for the same period in 2023[80] Assets and Liabilities - Total current assets decreased to $8,724,000 as of June 30, 2024, down from $9,784,000 at the end of 2023[12] - Current liabilities decreased to $59,965,000 from $64,755,000 at the end of 2023, indicating improved financial stability[12] - Total assets decreased to $21,013,000 as of June 30, 2024, down from $22,416,000 at the end of 2023[12] - Stockholders' deficit improved to $(39,606,000) as of June 30, 2024, compared to $(43,178,000) at the end of 2023[14] - Cash and cash equivalents increased to $2,460,000 from $1,797,000 at the end of 2023, indicating better liquidity[12] Cash Flow and Financing - The company reported a net cash provided by operating activities of $432,000 for the six months ended June 30, 2024, compared to a net cash used of $1,215,000 in the same period of 2023[25] - Cash at the end of the period increased to $2,460,000 from $1,182,000 at the beginning of the period, representing a net change in cash of $663,000[25] - The company plans to obtain additional capital through various means, including the conversion of outstanding warrants and issuance of common stock[33] - The company has raised concerns regarding its ability to continue as a going concern due to recurring losses and dependency on future financing[31] - The company terminated the Merger Agreement on June 25, 2024, which may impact its future capital raising efforts[44] Expenses and Margins - Gross margin improved to $5,240,000 in Q2 2024, up from $3,473,000 in Q2 2023, reflecting a gross margin percentage increase from 74.3% to 73.2%[17] - General and administrative expenses increased by $0.6 million, or 49%, for the three months ended June 30, 2024, primarily due to increased headcount expenses[92] - Research and development expenses increased by $0.1 million, or 40%, for the three months ended June 30, 2024, remaining at 3% of revenue[94] - Gross margin for the three months ended June 30, 2024, was 73%, a slight decrease from 74% in the same period of 2023[90] Shareholder Information - As of June 30, 2024, the total number of shares issued and outstanding increased to 1,181,272,961 from 1,140,559,527 as of December 31, 2023, reflecting an increase of approximately 3.6%[22] - Basic net income per share for the three months ended June 30, 2024, was $0.01, while diluted net income per share was $0.00, compared to a basic loss per share of $(0.01) and diluted loss per share of $(0.01) for the same period in 2023[46] - Total shares used for calculating basic income per share increased to 1,182,598 for the three months ended June 30, 2024, from 582,329 in the same period of 2023[46] Internal Controls and Compliance - The company has identified three material weaknesses in internal control over financial reporting as of June 30, 2024, which could lead to material misstatements in financial statements[109] - Management has hired a third-party consultant to enhance internal controls and perform a risk assessment over financial reporting processes[112] - The company plans to remediate identified material weaknesses throughout 2024, including hiring additional resources and redesigning accounting and IT processes[112] - The company lacks expertise in applying U.S. GAAP to complex transactions, which contributes to the identified material weaknesses[111] - The existence of material weaknesses requires significant time and expense for remediation, potentially affecting the company's financial statements and shareholder confidence[114] Legal and Regulatory Matters - The company has disclosed ongoing legal proceedings, which may impact its financial condition[117] - The company is exploring alternative options to seek an uplisting to a national exchange after terminating the Merger Agreement on June 25, 2024[82]

Sanuwave Health (SNWV) M&A Announcement June 04, 2024 08:30 AM ET Speaker0 Good day everyone and welcome to XenoWave Provides Corporate Update. At this time all participants are in a listen only mode. Please note this call is being recorded and I will be standing by should you need any assistance. It is now my pleasure to turn the conference over to CEO, Morgan Frank. Please go ahead. Speaker1 Good morning. Thank you, Nikki. So good morning, everyone. Thanks for joining us on the SANUWAVE corporate update c ...

Sanuwave Health (SNWV) Q1 2024 Earnings Call May 10, 2024 08:30 AM ET Speaker0 Please note that this call is being recorded, and I will be standing by should you need any assistance. It is now my pleasure to turn the conference over to Morgan Frank. Please go ahead. Speaker1 Thank you very much. Hi, everyone, and welcome to TANUWAVE's first quarter twenty twenty four earnings call. As many of you probably saw, our Form 10 Q was filed with the SEC Thursday night, and our earnings release was issued this morn ...

Financial Performance - Revenue for Q1 2024 was $5,786,000, representing a 53% increase from $3,775,000 in Q1 2023[16] - Gross margin improved to $4,202,000 in Q1 2024, compared to $2,513,000 in Q1 2023, indicating a significant enhancement in profitability[16] - Operating loss decreased to $1,050,000 in Q1 2024 from $1,978,000 in Q1 2023, reflecting improved operational efficiency[16] - Net loss for Q1 2024 was $4,528,000, a reduction from $13,080,000 in Q1 2023, showing progress in financial performance[16] - Revenue for the three months ended March 31, 2024, totaled $5.8 million, an increase of 53% compared to $3.8 million for the same period in 2023[70] - Net loss for the three months ended March 31, 2024, was $4.5 million, or $0.00 per basic and diluted share, compared to a net loss of $13.1 million, or $0.02 per basic and diluted share, for the same period in 2023[71] - Operating loss for the three months ended March 31, 2024, totaled $1.1 million, an improvement of $0.9 million compared to 2023[71] - Gross margin as a percentage of revenue improved to 73% for the three months ended March 31, 2024, compared to 67% for the same period in 2023, reflecting a 600 basis points increase[82] - The company reported a net loss of $4.5 million for the three months ended March 31, 2024, a 65% improvement from a net loss of $13.1 million in the same period of 2023[81] Assets and Liabilities - Total current assets increased to $10,831,000 as of March 31, 2024, up from $9,784,000 at the end of 2023[12] - Total liabilities rose to $70,919,000 as of March 31, 2024, compared to $65,594,000 at the end of 2023, indicating increased financial obligations[12] - Cash and cash equivalents at the end of Q1 2024 were $2,936,000, up from $1,797,000 at the end of 2023, reflecting improved liquidity[20] - As of March 31, 2024, the Company had $21.7 million in senior secured debt, with a carrying value of $18.9 million after accounting for discounts[49] - The Company has accrued expenses totaling $6.8 million as of March 31, 2024, compared to $6.0 million at the end of 2023[48] - Total Convertible Promissory Notes Payable as of March 31, 2024, amounted to $10.004 million, with a remaining debt discount of $3.042 million[55] Capital and Financing - The company plans to raise additional capital in 2024 primarily through a merger, which is critical for ongoing operations[29] - Management highlighted the need for substantial resources for the commercialization of UltraMIST and PACE systems, necessitating further capital[28] - The Company deferred $1.6 million in merger costs until the closing of the merger, which is part of the recapitalization under the Merger Agreement[36] - The Merger Agreement, entered into on August 23, 2023, will result in SEPA acquiring 100% of the Company's equity securities, with the Company's stockholders expected to hold approximately 69-70% of the combined company[39] - The Company issued 7,793,000 shares of Class A Common Stock as part of the Merger Consideration, allocated pro rata based on ownership after conversion of outstanding securities[40] - Management plans to obtain additional capital in 2024 primarily through the closure of the Merger, which is expected to enhance the company's capital resources[89] Expenses and Costs - General and administrative expenses rose by $0.9 million or 33% for the three months ended March 31, 2024, primarily due to severance costs and non-recurring legal settlements[83] - Research and development expenses increased by 24% for the three months ended March 31, 2024, while remaining flat at 3% of revenue[86] - Interest expense on the Senior Secured Note was $1.9 million for the three months ended March 31, 2024, compared to $1.6 million for the same period in 2023[54] - Interest expense for the three months ended March 31, 2024, totaled $1.6 million, compared to $2.3 million for the same period in 2023[55] - Other expense, net decreased by $7.6 million to $3.5 million for the three months ended March 31, 2024, primarily due to a decrease in the change in fair value of derivatives expense[87] Internal Controls and Compliance - The company has identified three material weaknesses in internal control over financial reporting, which could lead to material misstatements in financial statements[101] - As of March 31, 2024, the company's disclosure controls and procedures were not operating effectively, as concluded by the Chief Executive Officer and Chief Financial Officer[100] - Management is committed to remediating the identified material weaknesses and has engaged a third-party consultant to assist in designing and documenting internal controls[103] - The company plans to implement internal controls for high-risk processes throughout 2024, including hiring additional resources to segregate duties and mitigate risks[103] - The company lacks the expertise and resources to properly apply U.S. GAAP to complex transactions, which has contributed to the identified material weaknesses[106] - There have been no changes in internal control over financial reporting during the quarter ended March 31, 2024, that materially affect internal controls[107] - The company is working with an outside vendor to improve IT general controls over its enterprise resource planning system[104] - The existence of material weaknesses requires significant time and expense for remediation, which could adversely affect the company's financial reporting and stock price[105] Market and Economic Conditions - Inflation has increased expenses related to employee compensation, office space leasing, and research and development, potentially impacting the company's financial condition[97] - The company may discover additional material weaknesses that require further time and resources to remediate[103] Shareholder Impact - The company reported a significant increase in weighted average shares outstanding, rising to 1,162,250,687 in Q1 2024 from 575,028,811 in Q1 2023, indicating potential dilution for existing shareholders[16] - The Company reported a diluted net loss per share of $0.12 for the three months ended March 31, 2024, compared to a loss of $0.10 for the same period in 2023[45] - The weighted average number of shares outstanding increased to 1,162,251 thousand shares for the three months ended March 31, 2024, up from 575,029 thousand shares in the prior year[45]