Sanara MedTech(SMTI) - 2021 Q1 - Quarterly Report

Financial Performance - For the three months ended March 31, 2021, the company generated revenues of $5,009,436, a 42% increase from $3,524,331 for the same period in 2020[122] - Surgical product sales amounted to $4,711,613 for the three months ended March 31, 2021, compared to $3,272,892 in the prior year[116] - The company reported a net loss of $1,183,376 for the three months ended March 31, 2021, an improvement from a net loss of $1,841,012 in the same period of 2020[127] - Cost of goods sold for the three months ended March 31, 2021, was $474,433, up from $330,188 in the same period of 2020, primarily due to higher sales volume[123] - For the three months ended March 31, 2021, net cash used in operating activities was $1,261,604, a decrease from $2,032,019 for the same period in 2020, primarily due to higher sales revenue[134] - Net cash provided by financing activities for the three months ended March 31, 2021 was $28,739,257, compared to $0 for the same period in 2020, driven by proceeds from an underwritten public offering of 1,265,000 shares at $25.00 per share, resulting in gross proceeds of $31,625,000[136] Research and Development - Research and development expenses increased to $118,212 for the three months ended March 31, 2021, from $4,387 in the same period of 2020, due to new studies and development projects[125] - The company has multiple products in its pipeline and intends to begin marketing two biologic products for surgical and wound care applications in 2021[108] Cash and Financing - Cash on hand at March 31, 2021, was $27,328,628, a significant increase from $455,366 at December 31, 2020[129] - The company anticipates using net proceeds from a public offering of 1,265,000 shares at $25.00 per share to expand its salesforce and further develop its product pipeline[129] Expenses and Costs - The company expects SG&A expenses to increase in absolute dollars but decrease as a percentage of revenue as the commercial organization grows[119] - The company incurred $148,521 in costs for technical services provided by Rochal for the three months ended March 31, 2021[142] - The company recorded inventory obsolescence expense of $7,312 for the three months ended March 31, 2021, compared to $20,116 for the same period in 2020[152] Licensing and Agreements - The company has an exclusive world-wide license to market and sell antimicrobial products under the BIAKŌS License Agreement, with a payment of $750,000 made in March 2021 through the issuance of 20,834 shares of common stock[133] - The company amended the CellerateRX sublicense agreement to extend the term to May 17, 2050, with minimum royalties of $400,000 per year for the first five years[137] - The company acquired Catalyst's 50% interest in Cellerate, LLC in exchange for 1,136,815 shares of Series F Convertible Preferred Stock[139] Other Information - Royalties due under the CellerateRX sublicense agreement for the three months ended March 31, 2021 totaled $192,586, up from $100,000 for the same period in 2020[137] - As of March 31, 2021, there were no related party promissory notes or accrued interest outstanding following the conversion of a $1,500,000 promissory note into common stock[140] - The company does not anticipate that inflation and changing prices will have a material impact on future results of operations[145]