Cautionary Notice Regarding Forward Looking Statements
The information contained in Item 2 contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Actual results may materially differ from those projected in the forward-looking statements as a result of certain risks and uncertainties set forth in this report. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual results will not be different from expectations expressed in this report.
This filing contains a number of forward-looking statements which reflect management's current views and expectations with respect to our business, strategies, products, future results and events, and financial performance. All statements made in this filing other than statements of historical fact, including statements addressing operating performance, events, or developments which management expects or anticipates will or may occur in the future, including statements related to distributor channels, volume growth, revenues, profitability, new products, adequacy of funds from operations, statements expressing general optimism about future operating results, and non-historical information, are forward looking statements. In particular, the words "believe," "expect," "intend," "anticipate," "estimate," "may," and variations of such words, and similar expressions identify forward-looking statements, but are not the exclusive means of identifying such statements, and their absence does not mean that the statement is not forward-looking. These forward-looking statements are subject to certain risks and uncertainties, including those discussed below. Our actual results, performance or achievements could differ materially from historical results as well as those expressed in, anticipated, or implied by these forward-looking statements. We do not undertake any obligation to revise these forward-looking statements to reflect any future events or circumstances.
Readers should not place undue reliance on these forward-looking statements, which are based on management's current expectations and projections about future events, are not guarantees of future performance, are subject to risks, uncertainties and assumptions (including those described below), and apply only as of the date of this filing. Our actual results, performance or achievements could differ materially from the results expressed in, or implied by, these forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
Overview
The Company develops, manufactures and distributes evolutionary medical devices focused on the rapid healing of wounds and reduction of pain, edema and inflammation in the human body. The Company's non-invasive bioelectric medical devices are designed to target inflammation, cardiovascular diseases, chronic kidney disease, and central nervous system disorders ("CNS" disorders).
The Company's non-invasive Electroceutical® therapeutics device, SofPulse®, using pulsed short-wave radiofrequency at 27.12 MHz has been FDA-Cleared and CE Marked for the palliative treatment of soft tissue injuries and post-operative plain and edema, and has CMS National Coverage for the treatment of chronic wounds. The Company's current portfolio of pre-clinical stage Electroceutical® therapeutics devices address chronic kidney disease, liver disease non-alcoholic steatohepatitis (NASH), cardiovascular and peripheral artery disease (PAD) and ischemic stroke.
Endonovo's core mission is to transform the field of medicine by developing safe, wearable, non-invasive bioelectric medical devices that deliver the Company's Electroceutical® Therapy. Endonovo's bioelectric Electroceutical® devices harnesses bioelectricity to restore key electrochemical processes that initiate anti-inflammatory processes and growth factors in the body necessary for healing to rapidly occur.
20 Going Concern
Our independent registered auditors included an explanatory paragraph in their
opinion on our consolidated financial statements as of and for the fiscal year
ended
The
Critical Accounting Policies
A summary of our significant accounting policies is included in Note 1 of the
"Notes to the Consolidated Financial Statements," contained in our Form 10-K for
the year ended
New Accounting Pronouncements
See Note 1 of Notes to Condensed Consolidated Financial Statements for further discussion of new accounting standards that have been adopted or are being evaluated for future adoption.
Results of Operations
Nine Months ended
Nine Months Ended September 30, Favorable 2022 2021 (Unfavorable) % Revenue$ 13,892 $ 72,789 $ (58,897 ) -80.9 % Cost of revenue 5,124 6,124 1,000 16.3 % Gross profit 8,768 66,665 (57,897 ) -86.9 % Operating expenses 2,790,057 1,919,418 (870,639 ) -45.3 % Loss from operations (2,781,289 ) (1,852,753 ) (928,536 ) -50.1 % Other expense (2,761,411 ) (3,648,471 ) 887,060 24.3 % Net loss$ (5,542,700 ) $ (5,501,224 ) $ 41,476 0.75 % Revenue
Revenue of the Company's SofPulse® product during the nine months ended
Revenues for our SofPulse® product is typically recognized at the time the
product is shipped, at which time the title passes to the customer, and there
are no further performance obligations. Revenue continues to be negatively
impacted by the COVID-19 contagious disease outbreak in
21 Cost of Revenue
Cost of revenue during the nine months ended
Operating Expenses
Operating expenses increased by
Other Expense/Income
Other expense decreased by
Three Months ended
Three Months Ended September 30, Favorable 2022 2021 (Unfavorable) % Revenue$ 10,960 $ 7,790 $ 3,170 40.7 % Cost of revenue 4,027 3,103 (924 ) (29.8 )% Gross profit 6,933 4,687 2,246 47.9 % Operating expenses 503,711 696,943 193,232 27.7 % Loss from operations (496,778 ) (692,256 ) 195,478 28.2 % Other expense (106,582 ) (831,418 ) 724,836 87.2 % Net loss$ (603,360 ) $ (1,523,674 ) $ 920,314 60.4 % Revenue
Revenue of the Company's SofPulse® product during the three months ended
Cost of Revenue
Cost of revenue during the three months ended
Operating Expenses
Operating expenses decreased by
Other Income (Expense)
Other expense for the three months ended
22
Liquidity and Capital Resources
As of September 30, December 31, 2022 2021 Favorable (Unfavorable) Working Capital Current assets$ 24,083 $ 94,855 $ (70,772 ) Current liabilities 20,977,309 17,701,710 (3,275,599 ) Working capital deficit$ (20,953,226 ) $ (17,606,855 ) $ (3,346,371 ) Long-term debt$ 79,825 $ 79,825 $ - Shareholders' deficit$ (19,605,879 ) $ (15,774,324 ) $ (3,831,555 ) Nine Months Ended September 30, Favorable 2022 2021 (Unfavorable) Statements of Cash Flows Select Information Net cash provided (used) by: Operating activities$ (453,297 ) $ (595,288 ) $ 141,991 Financing activities$ 390,500 $ 587,600 $ (197,100 ) As of September 30, December 31, Favorable 2022 2021 (Unfavorable)
Balance Sheet Select Information
Cash$ 23,139 $ 85,936 $ (62,797 )
Accounts payable and accrued expenses
Since
23
The Company is not aware of any recently issued accounting pronouncements that when adopted will have a material effect on the Company's financial position or result of its operation.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
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