Sanara MedTech(US:SMTI)2025-11-12 21:03Financing and Loans - Sanara MedTech reported a senior secured term loan of up to $55.0 million under the CRG Term Loan Agreement, with the first borrowing of $15.0 million used to repay an existing loan[200]. - The CRG Term Loan has a maturity date of March 30, 2029, with the option for additional borrowings before December 31, 2025[200]. - The CRG Term Loan Agreement provides for a senior secured term loan of up to $55.0 million, with $42.8 million of principal outstanding as of September 30, 2025[240][243]. - The company anticipates sufficient cash flow to fund operations and capital expenditures for at least the next 12 months[236]. - As of September 30, 2025, the company was in compliance with all debt covenants[248]. Revenue and Profitability - For the three months ended September 30, 2025, the company generated net revenue of $26.3 million, a 22% increase from $21.7 million in the same period of 2024[218]. - For the nine months ended September 30, 2025, net revenue reached $75.6 million, reflecting a 25% increase compared to $60.4 million for the same period in 2024[218]. - Gross profit for the three months ended September 30, 2025, was $24.5 million, a 24% increase from $19.7 million in the prior year[220]. - Gross profit for the nine months ended September 30, 2025, was $69.9 million, representing a 28% increase from $54.5 million in the same period of 2024[220]. - Adjusted EBITDA for the three months ended September 30, 2025, was $4.9 million, compared to $2.6 million in the same period of 2024[216]. - Net income from continuing operations was $0.8 million for the three months ended September 30, 2025, compared to a net loss of $0.2 million for the same period in 2024[228]. Expenses and Costs - Cost of goods sold for the three months ended September 30, 2025, was $1.9 million, down from $2.0 million in the same period of 2024[219]. - Selling, general and administrative expenses for the three months ended September 30, 2025, were $19.9 million, compared to $17.4 million in the prior year[222]. - Research and development expenses for the three months ended September 30, 2025, were $1.0 million, up from $0.8 million in the same period of 2024[223]. - Net loss from discontinued operations totaled $31.2 million for the three months ended September 30, 2025, compared to $2.7 million for the same period in 2024[227]. Acquisitions and Partnerships - The company acquired CarePICS for $2.0 million on April 1, 2025, and assumed $1.65 million in existing indebtedness[203]. - The company completed an asset purchase for $15.25 million on August 1, 2023, including $9.75 million in cash and $3.0 million in stock[237]. - The Applied Purchase Agreement includes an additional potential earnout of up to $10.0 million based on performance thresholds[238]. - The company entered into a licensing agreement with Tufts University to develop and commercialize 18 unique collagen peptides, with a minimum annual royalty of $50,000 starting from the first anniversary of the first commercial sale[199]. - Sanara MedTech acquired exclusive U.S. marketing rights for OsStic Synthetic Injectable Structural Bio-Adhesive Bone Void Filler through a licensing agreement with Biomimetic Innovations Limited[201]. - The company entered into the BMI License Agreement on January 16, 2025, acquiring exclusive U.S. marketing rights for OsStic and ARC, with a 3% royalty on OsStic net sales[249][251]. - The company made an initial cash investment of approximately $3.1 million in BMI, increasing its ownership to approximately 12.499% as of October 2, 2025[253]. Product Development and Innovation - Sanara MedTech established a 50/50 strategic alliance with InfuSystem Holdings, focusing on delivering a complete wound care solution aimed at improving patient outcomes and lowering care costs[198]. - The company’s lead product, CellerateRX Surgical, is a hydrolyzed collagen used for managing surgical wounds, particularly beneficial for patients with comorbidities[192]. - BIASURGE, a sterile no-rinse surgical solution, is indicated for wound irrigation and contains an antimicrobial preservative effective against a broad spectrum of microorganisms[194]. - FORTIFY TRG and FORTIFY FLOWABLE are advanced wound care products designed for various wound types, including pressure ulcers and surgical wounds, and are 510(k) cleared[195][196]. - Sanara MedTech's in-house research and development team, Rochal Technologies, is focused on an extensive pipeline of innovative products under development[189]. - The company aims to expand its offerings in the U.S. surgical tissue repair and advanced wound care markets, emphasizing long-term strategic partnerships[190]. Cash Flow and Investments - For the nine months ended September 30, 2025, net cash provided by operating activities was $2.8 million, a significant increase from net cash used of $1.0 million in the same period of 2024[260]. - Net cash used in investing activities for the nine months ended September 30, 2025, was $12.5 million, primarily due to a $5.9 million investment in BMI and $2.1 million related to the CarePICS Acquisition[261]. - Net cash provided by financing activities decreased to $8.7 million for the nine months ended September 30, 2025, compared to $18.6 million in the same period of 2024[262]. - Total cash investment in THP was $4.0 million in Q3 2025, with projected winding down costs between $1.5 million and $2.5 million[234]. - Cash on hand as of September 30, 2025, was approximately $14.9 million, down from $15.9 million at December 31, 2024[234]. Impairments and Future Expectations - Following the discontinuation of the THP segment in September 2025, the carrying value of CarePICS technology was fully impaired to zero[204]. - The contingent earnout liability related to the CarePICS acquisition was assessed and reduced to zero due to the impairment of the technology developed by CarePICS[259]. - The company expects to incur additional costs related to potential acquisitions and product development in the future[235]. - The company anticipates annual minimum revenue of at least $60.0 million for the twelve-month period beginning January 1, 2024, increasing to $105.0 million for each twelve-month period thereafter[252]. - Inflation and changing prices have not had a material impact on the company's historical results and are not expected to affect future operations[267].