SANUWAVE Health, Inc.
For the period ended Mar 31, 2025. Filed May 8, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 8, 2025
SNWV$2.19-2.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-07.
0001628280-24-046396
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-08.
0001628280-25-023881
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 46 previous paragraphs and 50 current paragraphs.
18 unchanged; 10 reworded; 22 added; 18 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (22)
Current report
Recent Developments
Current report
On March 7, 2025, our common stock began trading on The Nasdaq Global Market under the ticker symbol “SNWV.”
Current report
Revenue
Current report
Revenues for the three months ended March 31, 2025, were$9.3 million, compared to$5.8 million for the same period of 2024, anincrease of$3.6 million or 61%. Theincrease in net sales was primarily driven by the growth in quantity of UltraMIST® disposables and systems sold as well as a strategic focus on price discipline. The quantity of UltraMIST® disposables sold increased by 32% in the three months ended March 31, 2025, as compared to the same period of 2024. The quantity of UltraMIST® systems sold increased by 128% in the three months ended March 31, 2025, as compared to the same period of 2024. Pricing of the UltraMIST® system and disposables also showed growth in the three months ended March 31, 2025, as compared to the same period of 2024; the average selling price of disposables increased 8% in the three months ended March 31, 2025, and the average selling price of systems increased 8% in the three months ended March 31,
Current report
Revenue from UltraMIST® totaled 99% of total revenue in the three months ended March 31, 2025, and over 90% in the same period of 2024.
Current report
Cost of Revenue
Current report
Cost of revenues for the three months ended March 31, 2025, was$2.0 million, compared to$1.6 million for the same period of 2024. Gross profit as a percentage of revenues was 79% for the three months ended March 31, 2025, compared to 73% for the same period in 2024. This increase in gross margin was largely driven by improved pricing initiatives on our UltraMIST® systems and applicators.
Current report
General and Administrative
Current report
General and administrative expenses for the three months ended March 31, 2025, were $4.5 million as compared to $3.7 million for the same period of 2024, an increase of $0.8 million, or 22%. The increase in the three months ended March 31, 2025, as compared to the same period of 2024, was primarily due to non-cash charges for stock-based compensation expense totaling $0.8 million.
Current report
Selling and Marketing
Current report
Selling and marketing expenses for the three months ended March 31, 2025, were$1.5 million as compared to$1.2 million for the same period of 2024, anincrease of$0.3 million, or 24%. The year-over-year increase in sales and marketing expenses in the three months ended March 31, 2025, was largely driven by increased headcount and non-cash charges for stock-based compensation.
Current report
Research and Development
Current report
Research and development expenses for each of the three months ended March 31, 2025, and March 31, 2024, were$0.2 million. The research and development costs in the three months ended March 31, 2025, remained approximately consistent with the costs in the same period of 2024.
Current report
Other Income (Expense), net
Current report
Other expense, net consists of the following:
Current report
Other expenses totaled$6.7 million for the three months ended March 31, 2025, as compared to$3.5 million for the same period of 2024, an increase of$3.2 million. The increase was primarily driven bya decrease in other income of $2.7 million and an increased loss from the change in the fair value of derivative liabilities of$2.4 million, partially offset by a decrease in interest expense of $1.7 million. The change in fair value of derivative liability relates to valuation of warrants previously issued by the Company. Other income for the three months ended March 31, 2024 mainly consists of theone-time payment of $2.5 million related to the Patent License as described in Note 16.
Current report
The Company has incurred recurring operating losses in prior years, has negative working capital, and the Senior Secured Note becomes due in September 2025, which raises substantial doubt about our ability to continue as a going concern for a period of 12 months from the filing of the Form 10-Q.
Current report
During the current and prior fiscal year, the Company has achieved operating income, reflecting a significant improvement in its financial performance. The Company is addressing its financial obligations, including the significant portion of debt that is coming due in September 2025. Management is actively engaged in discussions with lenders and financial institutions to refinance this debt, which would extend the maturity of the debt and provide additional liquidity to support ongoing operations and strategic initiatives.
Current report
The following table presents summarized cash flow information:
Current report
Cash used in operating activities forthe three months ended March 31, 2025, totaled$1.5 million and consisted primarily of a net loss of $5.7 million and a decrease in net operating assets of $2.5 million, partially offset by non-cash charges of $4.9 million related to a change in the fair value of derivative liabilities, $1.0 million related to stock-based compensation expense, and $0.5 million related to amortization of debt issuance and debt discounts. Net operating assets consisted primarily of inventory, accrued expenses, and accounts receivable to support the growth of our operations.
Current report
Cash provided by operating activities for the three months ended March 31, 2024 totaled $1.1 million and consisted primarily of a net loss of $4.5 million, partially offset by non-cash charges of $2.5 million related to a change in the fair value of derivative liabilities and $1.6 million related to amortization of debt issuance and debt discounts, as well as the receipt of $2.5 million related to the License and Option Agreement, as further discussed in Note 16 to the financial statements.
Current report
Derivative Liabilities from Warrants
Removed paragraphs (18)
Previous report
Net loss for thenine months ended September 30, 2024, was$18.6 million, compared to a net loss of$44.0 million for the same period in 2023. The decrease in our net loss for thenine months ended September 30, 2024, was primarily related to an increase in operating income, a decrease in change of fair value of derivative liabilities, a gain on the extinguishment of debt, and a one-time receipt related a third-party license and option agreement. For thenine months ended September 30, 2024, our operating income totaled$2.9 million, which is an improvement of$4.5 million compared to the same period of 2023.
Previous report
All share numbers, including the number of shares underlying warrants, options and convertible debt, and per share amounts presented in these financial statements, including these footnotes reflect a one-for-three hundred seventy five (1:375) reverse stock split of the Company's common stock effected on October 18, 2024 (the "Reverse Stock Split"). The Company's authorized shares of common and preferred stock along with the par value did not change. No fractional shares will be issued as a result of the reverse stock split. Any fractional shares that would have resulted from the reverse stock split will be settled in cash. The reverse stock split will affect all common stockholders uniformly and will not alter any stockholder's percentage interest in the Company's common stock, except to the extent that the reverse stock split results in some stockholders experiencing an adjustment of a fractional share as described above.
Previous report
Revenues and Gross Margin
Previous report
Revenues for the three month-period ended September 30, 2024, were$9.4 million compared to$5.0 million for the same period of 2023, an increase of$4.4 million, or 89%. The increase was primarily driven by the continued increased sales of our UltraMIST® system. The increase in revenues was partially due to an increase in the average selling price of our consumables and parts revenue of 26% year over year, and the remainder of the growth was related to an increase in the number of consumables and systems sold year over year. 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.
Previous report
Revenues for thenine month-period ended September 30, 2024, were$22.3 million compared to$13.4 million for the same period of 2023, an increase of$8.9 million, or 66%. The increase was primarily driven by the continued increased sales of our UltraMIST® system. The increase in revenues was due to an increase in the average selling price of our consumables and parts revenue year over year, and the remainder of the growth was related to an increase in the number of consumables and systems sold year over year. Gross margin as a percentage of revenue increased to 74% during thenine months ended September 30, 2024, from 71% in the same period of 2023.
Previous report
General and Administrative Expenses
Previous report
General and administrative expenses decreased$0.1 million or 5% for the three months ended September 30, 2024, compared with the same period of 2023. The decrease for the three months ended September 30, 2024, was primarily due to a decrease in insurance and consulting costs. General and administrative expenses increased$1.4 million, or 21%, for thenine months ended September 30, 2024, compared with the same period of 2023. The increase for thenine months ended September 30, 2024, was primarily due to severance costs, a non-recurring legal settlement, increased headcount expenses.
Previous report
Selling and Marketing Expenses
Previous report
Selling and marketing expenses increased by$1.2 million, or 112%, for the three months ended September 30, 2024, as compared with the same period of 2023. The increase was primarilydue to increased head count and commission expenses as the sales team and activity grew in comparison to the same period of 2023. Selling and marketing expenses increased by$1.0 million, or 30%, for thenine months ended September 30, 2024, as compared with the same period of 2023. The increase was primarily due to increased head count and commission expenses as the sales team and activity grew in comparison to the same period of 2023.
Previous report
Research and Development Expenses
Previous report
Research and development expenses decreased slightly for the three months ended September 30, 2024, as compared with the same period of 2023. Research and development expenses as a percentage of revenue decreased to 1.7% during the three months ended September 30, 2024, compared to 3.3% for the same period in 2023. Research and development expenses increased$83,000, or 19%, for thenine months ended September 30, 2024, as compared with the same period of 2023. Research and development expenses as a percentage of revenue decreased to 2.3% during thenine months ended September 30, 2024, compared to 3.2% for the same period in 2023.
Previous report
Other (Expense)/Income, net
Previous report
nm - not meaningful
Previous report
Other expense decreased by$0.6 million to$22.6 million for the three months ended September 30, 2024, as compared to the same period for 2023. The change was primarily due to a decrease in change in fair value of derivatives expense of$0.5 million.
Previous report
Other expense decreased by$20.9 million to$21.5 million for thenine months ended September 30, 2024, as compared to the same period for 2023. The decrease was primarily due to a decrease in change in fair value of derivatives expense of$12.3 million, recognition of a non-recurring gain on extinguishment of debt of$5.3 million and the receipt of $2.5 million from a third-party license and option agreement.
Previous report
Statement of Cash Flows
Previous report
Cash provided by operating activities during thenine months ended September 30, 2024, totaled$1.7 million as compared to cash used by operating activities of$3.3 million in the previous year period. This improvement in cash provided by operations was primarily driven by the receipt of $2.5 million related to a license agreement and option agreement, the increase in revenues, and improvements in operations management including accounts receivable, inventory and accounts payable.
Previous report
Derivative Liabilities from Embedded Conversion Options and Warrants
Reworded paragraphs (10)
Previous wording
We continued to realize significant revenue growth during the three months ended September 30, 2024, as compared to the same period in 2023. Revenue for the three months ended September 30, 2024, totaled$9.4 million, an increase of 89%, as compared to$5.0 million for the same period of 2023. Revenue for thenine months ended September 30, 2024, totaled$22.3 million, an increase of 66%, as compared to$13.4 million for the same period of 2023.
Current wording
We continued to realize significant revenue growth during the three months ended March 31, 2025, as compared to the same period in 2024. Revenue for the three months ended March 31, 2025, totaled$9.3 million, an increase of 61%, as compared to$5.8 million for the same period of 2024.
Previous wording
Net loss for the three months ended September 30, 2024, was$20.7 million compared to a net loss of$23.7 million for the same period in 2023. The decrease in our net loss for the three months ended September 30, 2024, was primarily related to an increase in operating income and a decrease in change of fair value of derivative liabilities. For the three months ended September 30, 2024, our operating income totaled$2.0 million, which is an improvement of$2.5 million compared to the same period of 2023.
Current wording
Net loss for the three months ended March 31, 2025, was$5.7 million compared to a net loss of$4.5 million for the same period in 2024. The increase in our net loss for the three months ended March 31, 2025, was primarily related to an increase in change of fair value of derivative liabilities. For the three months ended March 31, 2025, our operating income totaled$1.0 million, which is an improvement of$2.0 million compared to the same period of 2024.
Previous wording
Throughout this Management’s Discussion and Analysis of Financial Condition and Results of Operations, we present certain financial measures that facilitate management's review of the operational performance of the Company and as a basis for strategic planning; however, such financial measures are not presented in our financial statements prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). These financial measures are considered "non-GAAP financial measures" and are intended to supplement, and should not be considered as superior to, or a replacement for, financial measures presented in accordance with U.S. GAAP.
Current wording
Throughout this Management’s Discussion and Analysis of Financial Condition and Results of Operations, we present certain financial measures that facilitate management's review of the operational performance of the Company and as a basis for strategic planning; however, such financial measures are not presented in our financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S.”) (“U.S. GAAP”). These financial measures are considered "non-GAAP financial measures" and are intended to supplement, and should not be considered as superior to, or a replacement for, financial measures presented in accordance with U.S. GAAP.
Previous wording
The Company uses Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) and Adjusted EBITDA to assess its operating performance. Adjusted EBITDA is Earnings before Interest, Taxes, Depreciation and Amortization adjusted for the change in fair value of derivatives and any significant non-cash or non-recurring one-time charges. EBITDA and Adjusted EBITDA should not be considered as alternatives to net income as a measure of financial performance or any other performance measure derived in accordance with U.S. GAAP, and they should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. These non-GAAP financial measures are presented in a consistent manner for each period, unless otherwise disclosed. The Company uses these measures for the purpose of evaluating its historical and prospective financial performance, as well as its performance relative to competitors. These measures also help the Company to make operational and strategic decisions. The Company believes that providing this information to investors, in addition to GAAP measures, allows them to see the Company’s results through the eyes of management, and to better understand its historical and future financial performance. These non-GAAP financial measures are also frequently used by analysts, investors, and other interested parties to evaluate companies in our industry, when considered alongside other U.S. GAAP measures.
Current wording
The Company uses Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) and Adjusted EBITDA to assess its operating performance. Adjusted EBITDA is Earnings before Interest, Taxes, Depreciation and Amortization adjusted for the change in fair value of derivatives and any significant non-cash or non-recurring infrequent charges. EBITDA and Adjusted EBITDA should not be considered as alternatives to net loss as a measure of financial performance or any other performance measure derived in accordance with U.S. GAAP, and they should not be construed as an inference that our future results will be unaffected by unusual or infrequent items. These non-GAAP financial measures are presented in a consistent manner for each period, unless otherwise disclosed. The Company uses these measures for the purpose of evaluating its historical and prospective financial performance, as well as its performance relative to competitors. These measures also help the Company to make operational and strategic decisions. The Company believes that providing this information to investors, in addition to U.S. GAAP measures, allows them to see the Company’s results through the eyes of management, and to better understand its historical and future financial performance. These non-GAAP financial measures are also frequently used by analysts, investors, and other interested parties to evaluate companies in our industry, when considered alongside other U.S. GAAP measures.
Previous wording
Since inception, we have incurred losses from operations each year. As of September 30, 2024, we had an accumulated deficit of$239 million. Historically, our operations have primarily been funded from the sale of capital stock, notes payable, and convertible debt securities. The events of default on our senior secured debt and working capital deficit have raised substantial doubt as to our ability to continue as a going concern for a period of at least twelve months from the filing of this Form 10-Q. We expect to devote substantial resources for the commercialization of the UltraMIST and PACE systems which will require additional capital resources to remain a going concern.
Current wording
Since inception, we have incurred losses from operations each year. As of March 31, 2025, we had an accumulated deficit of$257.1 million. Historically, our operations have primarily been funded from the sale of capital stock, issuances of notes payable, and convertible debt securities.
Previous wording
Management’s plans may include obtaining additional capital in 2024. We could obtain additional capital through the conversion of outstanding warrants, issuance of common or preferred stock, securities convertible into common stock, or secured or unsecured debt. These possibilities, to the extent available, may be on terms that result in significant dilution to our existing stockholders. In addition, there can be no assurances that our plans to obtain additional capital will be successful on the terms or timeline we expect, or at all. If these efforts are unsuccessful, we may be required to significantly curtail or discontinue operations or, if available, obtain funds through financing transactions with unfavorable terms.
Current wording
Although no assurances can be given that our plans to obtain refinancing will be successful or on the terms or timeline we expect, or at all, management believes that the actions taken to date, along with the planned initiatives, will enable the Company to meet its obligations as they become due and to continue as a going concern.. If these efforts are unsuccessful, we may be required to significantly curtail or discontinue operations or obtain funds through financing transactions with unfavorable terms.
Previous wording
We have used various accounting policies to prepare the condensed consolidated financial statements in accordance with U.S. GAAP. Our significant accounting policies are disclosed in Note 3 to the consolidated financial statements in Part II Item 8. “Financial Statements and Supplementary Data” in our Annual Report on Form 10-K filed with the SEC on March 21, 2024.
Current wording
We have used various accounting policies to prepare the condensed consolidated financial statements in accordance with U.S. GAAP. Our significant accounting policies are disclosed in Note 3 to the consolidated financial statements in Part II Item 8. “Financial Statements and Supplementary Data” in our 2024 Annual Report on Form 10-K filed with the SEC on March 20, 2025.
Previous wording
The Company classified certain convertible instruments as having embedded conversion options which qualified as derivative financial instruments to be separately accounted for. The Company also further determined that certain warrants also qualified as derivative financial instruments. Various valuation models were used to estimate the fair value of these derivative financial instruments that are classified as derivative liabilities on the condensed consolidated balance sheets. The models include subjective input assumptions that can materially affect the fair value estimates and as such are subject to uncertainty. Our significant input assumptions are discussed in Note 10 to the condensed consolidated financial statements.
Current wording
The Company determined that certain warrants qualified as derivative financial instruments. Various valuation models were used to estimate the fair value of these derivative financial instruments that are classified as derivative liabilities on the condensed consolidated balance sheets. The models include subjective input assumptions that can materially affect the fair value estimates and as such are subject to uncertainty. The Company's volatility is the most significant assumption and changes over time with the market. Our significant input assumptions are discussed in Note 10 to the condensed consolidated financial statements.
Previous wording
We have determined that we have one operating segment. Our revenues are generated from sales primarily in the United States. International sales include sales in Europe, Canada, the Middle East, Central America, South America, Asia, and Asia/Pacific. All significant expenses are generated in the United States and all significant assets are in the United States.
Current wording
We have determined that we have one operating segment. Our revenues are generated from sales primarily in the United States. International sales include sales in Europe, Canada, the Middle East, Central America, South America, Asia, and Asia/Pacific. All significant expenses are generated in the United States and all significant assets are in the United States. For further information on the Company's operating segment, refer to Note 18 to the condensed consolidated financial statements.
Previous wording
Our assets are, to an extent, liquid in nature, so they are not significantly affected by inflation. However, the rate of inflation, which has increased, affects expenses such as employee compensation, office space leasing costs and research and development charges, which may not be readily recoverable. To the extent inflation results in rising interest rates and has other adverse effects on the market, it may adversely affect our condensed consolidated financial condition and results of operations.
Current wording
Our assets are, to an extent, liquid in nature, so they are not significantly affected by inflation. However, the rate of inflation, which remains elevated, affects expenses such as employee compensation, office space leasing costs and research and development charges, which may not be readily recoverable. To the extent inflation results in rising interest rates and has other adverse effects on the market, it may adversely affect our consolidated financial condition and results of operations.